And this is significant why?

And this is significant why?

This morning Lilly (NYSE:LLY) announced top-line study results for their once weekly GLP-1 Dulaglutide, which according to a company issued press release; “ Eli Lilly and Company (NYSE: LLY) today announced positive top-line results of three completed Phase III AWARD trials for dulaglutide, an investigational, long-acting glucagon-like peptide 1 (GLP-1) analog being studied as a once-weekly treatment for type 2 diabetes. Primary efficacy endpoints, as measured by reduction in hemoglobin A1c (HbA1c) at the 1.5 mg dose, were met in three studies (AWARD-1, AWARD-3 and AWARD-5).  Having met the primary endpoints, superiority for HbA1c lowering was examined, and both doses of dulaglutide (0.75mg and 1.5mg) demonstrated statistically superior reduction in HbA1c from baseline compared to: exenatide twice-daily injection at 26 weeks (AWARD-1); metformin at 26 weeks (AWARD-3); and sitagliptin at 52 weeks (AWARD-5).”

Now Diabetic Investor understands that the company cannot compare their compound to all type 2 treatments but one just might think they would compare it to the relevant products they will be competing against should Dulaglutide make it to market. Looking over the all five of the AWARD studies Diabetic Investor could not find one which compared Dulaglutide to either Bydureon or Victoza. Again according to the press release:

“AWARD-1 was a randomized, 52-week, placebo-controlled comparison of the effects of dulaglutide and exenatide on glycemic control in patients with type 2 diabetes on metformin and pioglitazone.  The primary objective of the study, conducted in 978 patients, was to evaluate whether dulaglutide 1.5mg, dosed once-weekly, was superior to placebo in reducing HbA1c from baseline at 26 weeks.

AWARD-2 is an ongoing randomized, 78-week, open-label comparison of the effects of dulaglutide and insulin glargine on glycemic control in patients with type 2 diabetes on metformin and glimepiride.  The primary objective of the study is to evaluate whether dulaglutide 1.5 mg, dosed once-weekly, is non-inferior to insulin glargine in reducing HbA1c from baseline at 52 weeks. Superiority testing will be performed if the statistical criterion for non-inferiority is satisfied.

AWARD-3 was a randomized, 52-week, double-blind comparison of the effects of dulaglutide and metformin on glycemic control in patients with early type 2 diabetes.  The primary objective of the study, conducted in 807 patients, was to evaluate whether dulaglutide 1.5 mg, dosed once-weekly, was non-inferior to metformin in reducing HbA1c from baseline at 26 weeks.  Superiority testing was performed as the statistical criterion for non-inferiority was satisfied.

AWARD-4 is an ongoing randomized, 52-week, open-label comparison of the effects of dulaglutide and insulin glargine, both in combination with insulin lispro, in patients with type 2 diabetes.   The primary objective of the study is to evaluate whether dulaglutide 1.5 mg, dosed once-weekly, is non-inferior to insulin glargine in reducing HbA1c from baseline at 26 weeks. Superiority testing will be performed if the statistical criterion for non-inferiority is satisfied.

AWARD-5 was a randomized, 104 week, double-blind, placebo-controlled comparison of the effects of dulaglutide and sitagliptin on glycemic control in patients with type 2 diabetes on metformin.  The primary objective of the study, conducted in 1,098 patients, was to evaluate whether dulaglutide 1.5 mg, dosed once-weekly, was non-inferior to sitagliptin in reducing HbA1c from baseline at 52 weeks.  Superiority testing was performed as the statistical criterion for non-inferiority was satisfied.”

To Diabetic Investor the AWARD studies are just another example of why Lilly has lost whatever leadership position they once held in diabetes and confirms what everyone knows but seems afraid to say out loud, Lilly is no longer a relevant player in the diabetes drug marketplace. Even if dulaglutide makes it all the way through the FDA; why would any physician who’s prescribing GLP-1 therapy for their type 2 patients choose dulaglutide over what’s already on the market. As we have seen as the GLP-1 market continues to grow and evolve physicians are not just becoming more comfortable with the class but have followed the path predicted long ago by Diabetic Investor, in that, twice-daily Byetta would be trumped by once-daily Victoza which would be trumped by once-weekly Bydureon.

Although it’s still too early to tell if Bydureon will become the blockbuster we think it will be, the early results are encouraging. Now in the hands of Bristol Myers (NYSE:BMY) and AstraZeneca (NYSE:AZN), Bydureon has a large, dedicated and motivated sales team who will soon be able to promote not just the simple once-weekly dosing of the drug but a new pen delivery system which for all practical purposes will make taking Bydureon no different than any other injectable available in a pen.

The fact is Novo Nordisk (NYSE:NVO) and Amylin proved that GLP-1’s used in conjunction with either oral medications or insulin is superior to current treatment regimens. Put another way the AWARD studies would be news had dulaglutide not meet their primary endpoints, the fact the drug performed as every other GLP-1 has basically confirms what we’ve been saying all along; dulaglutide is just another late to market, copy-cat, me-too drug that doesn’t stand a chance once it gets to market.

Just to be fair Lilly isn’t the only company suffering from this affliction, as Sanofi (NYSE:SNY) has the same problem with their once-daily GLP-1, which by the way will reach the market before dulaglutide.

The real problem here is that unlike Sanofi who still has Lantus, Lilly really has nothing on the market in diabetes that’s clearly superior and must use price as their primary weapon to maintain share. One would have thought the company would have learned their lesson from Trajenta, which no matter how it’s measured is a colossal failure. Diabetic Investor remembers the company telling everyone that Trajenta would be successful and able to compete effectively against Januvia even though there were only minor, miniscule differences between the two drugs. But again as Diabetic Investor predicted Trajenta failed to gain any traction in the marketplace.

It seems as though Lilly has forgotten what made them a leader in diabetes and has decided that it doesn’t pay to be first to market with innovative treatments that clearly differentiate themselves from the competition. That the diabetes market is large enough and growing fast enough; that they can come out with cheap copy-cat drugs which will bring in solid, if not, spectacular revenues. This wouldn’t be such a bad strategy if the company where to be second to market with their cheap copy-cats, but one cannot see it working out when these cheap copy cats come are the third or fourth drug in the category.

Perhaps the most telling statement about where Lilly is headed again comes from today’s press release:

“We’re very encouraged by the results to date from our Phase III dulaglutide trials and are pleased to be one step closer to offering a new GLP-1 treatment option for type 2 diabetes,” said Enrique Conterno, President, Lilly Diabetes. “People with diabetes require different treatment options based on their individual needs. That’s why Lilly Diabetes is committed to delivering a broad, comprehensive portfolio of therapies.”

That’s a very nice quote which we’re sure was well thought out by the Lilly public relations team, the only problem is it’s complete horse manure. Dulaglutide is not a new GLP-1 treatment, and while one could argue that developing a portfolio of late to market, me-too copycat drugs is a board, comprehensive portfolio of therapies, it’s certainly not a portfolio that stands a chance of making much, if any, money for the company.

About the only accurate statement was Mr. Conterno’s stating that “people with diabetes require different treatment options based on their individual needs.” He just forgot to mention that the existing portfolio of options on the market and those coming to market, well ahead of Lilly’s options, are performing quite nicely.

Perhaps the most amazing thing of all isn’t that Lilly management has lost total contact with reality, although that is pretty amazing. Nope the most amazing thing is that Lilly stakeholders are letting the company get away with this ill-advised strategy and isn’t calling, screaming for change. To Diabetic Investor it looks like Carl Icahn went after the wrong diabetes company and that it’s Lilly management and board that are screwing up.