Lilly Reports – More of the same
For a company that was once a dominate player in diabetes Lilly (NYSE:LLY) appears to be plodding along until Byetta LAR gets approved by the FDA. While the company announced sales of Humalog increased 9%, this increase was driven primarily by higher net effective selling prices rather than greater demand. About the only major news coming out of this morning’s call was the company stated the PDUFA date for Byetta LAR is March 5th, 2010.
Given that Amylin (NASDAQ:AMLN) and Lilly are more closely aligned than ever before it seems that it’s just a matter of time before Lilly takes the plunge as they did with ICOS and buy Amylin. As everyone knows Diabetic Investor has long expected this move. With LAR now at the FDA and Amylin shares trading well below historical norms, this move makes even more sense.
Looking at the insulin market, a market once dominated by Lilly, it’s difficult to find much in the way of positive news for the company. While the company has done a fine job of upgrading their insulin delivery devices this has done little to increase sales. Frankly Lilly took way too long to recognize the fact that patients prefer insulin pens over syringe delivery. The company was also slow in acknowledging that Novo Nordisk (NYSE:NVO) was serious about the US insulin market allow Novo to gain valuable market share.
One can only hope that Lilly recognizes the truly unique opportunity they have with Byetta LAR. While it may seem obvious that patients would prefer a once weekly injection over a once daily injection, Byetta LAR will not sell itself. The company will have issues to deal with when LAR first hits the market. Although the needle used with LAR will be smaller than what people have imagined it will still be larger than a conventional insulin needle. Additionally until LAR is available in a pen, there will be a fair amount of education needed as patients will need to mix the drug prior to administration. Finally, the pancreatitis issue, although largely disproved, will not go away.
It’s well known that Lilly and Novo are mortal enemies and that Novo will do whatever it takes to become a player in the GLP-1 market. Hopefully Lilly has learned from past mistakes and not underestimate Novo a second time.
