No Surprise Here

No Surprise Here

This morning Lilly announced they were terminating the development of Peglispro. According to a company issued press release;

“Eli Lilly and Company (NYSE: LLY) today announced that it will cease development of basal insulin peglispro (BIL), a potential treatment for type 1 and type 2 diabetes, in order to focus research and development efforts on other assets in its portfolio and pipeline.

In February, Lilly announced it was delaying regulatory submission in order to better understand and characterize the potential effects, if any, of changes in liver fat observed with BIL treatment compared with insulin glargine treatment in the Phase 3 IMAGINE trials. No drug-induced liver impairment or Hy’s Law cases were observed in the IMAGINE clinical development program of more than 6,000 patients with type 1 and type 2 diabetes treated for up to 18 months (approximately 3,900 patients treated with BIL).

Over the past several months, Lilly engaged with regulatory authorities and other external experts to assess potential development plans for BIL that could provide additional clarity on the liver fat data observed in the IMAGINE trials. The decision to stop the program was informed by these conversations – and not by any new safety signals – and was ultimately driven by the decision to focus research and development efforts on other potential treatments.”

Ironically shares of Lilly are UP on this news in early trading, perhaps the Street sees this as net positive allowing Lilly to allocate resources to their biosimilar version of Lantus. For our part we also view this as a non-event as the last thing we need was yet another long acting insulin. Frankly with this news Lilly can now avoid the issues facing Novo Nordisk (NYSE:NVO) with Tresiba and Sanofi (NYSE:SNY) with Toujeo. As both of these newer long acting insulins are struggling to gain share forcing both Novo and Sanofi to more heavily discount/rebate these offerings.

The simple fact is and yes we are being redundant here but Lantus works just fine, Lilly’s biosimilar works as well as Lantus and these newer long acting insulins are just incrementally better. Simply put like so many other areas in diabetes this becoming a commodity market. Lilly knew that unless Peglispro absolutely knocked it out of the park they would be in for a major battle, given the liver issues this killed any chance at all. With Peglispro officially dead the company can now fully concentrate on launching their biosimilar version of Lantus. A drug which we have stated before will be truly a game changer and could forever alter the balance of power in the insulin market.