Eli Lilly's Dulaglutide: The Same, But Better
Eli Lilly needs a big win to offset recent high profile patent expirations and that's why the company's recent release of data for its promising GLP-1 diabetes drug dulaglutide is so important. If Lilly's drug impresses doctors, it may position it to win market share away from competing GLP-1 therapies from Novo Nordisk and AstraZeneca .
Racing to improve diabetes treatment
Lilly will be the third company to hit the market with a GLP-1 drug, following Novo (which markets Victoza) and AstraZeneca (which sells Byetta and Bydureon). Those three potential competitors -- dulaglutide is awaiting FDA approval -- work by mimicking a hormone, GLP-1, associated with improving the effectiveness of insulin. The drugs not only smooth-out how the body uses insulin, but have also been associated with slowing digestion and lowering body weight.
The effectiveness of these compounds has led to significant sales. Novo sold more than $300 million of Victoza in the U.S. last quarter, good enough to rank the compound as the 44th best selling drug in America during fourth quarter. Byetta and Bydureon, which were co-marketed with Bristol-Myers up until December, contributed more than $350 million in sales to AstraZeneca last year. Bristol recognized another $698 million in full year sales across the two compounds in 2013.
Lilly thinks dulaglutide can hack away at those sales given its once-weekly dosing is friendlier than the daily dosing for Victoza and twice daily dosing of Byetta (Bydureon is also administered once weekly). However, getting doctors to prescribe dulaglutide instead of these proven therapies is only going to happen if Lilly's marketing team can make a compelling argument for efficacy.
Lilly's recently released data appears to help make that case. Dulaglutide performed about the same as Victoza in Lilly's phase 3 head-to-head comparison. And while non-inferiority doesn't sound like a slam dunk marketing message, it shifts the conversation to patient adherence and convenience and away from efficacy.
The non-inferiority claim may also help convince doctors interested in converting patients from Byetta to Bydureon to consider dulaglutide instead. In studies, Bydureon failed to achieve non-inferiority to Victoza.
Lilly may also be able to wrestle sales away from other diabetes drugs too. The company will update investors on a study comparing dulaglutide to Sanofi's top selling Lantus at meetings later this year. If results are compelling, dulaglutide's opportunity gets bigger given Lantus had over $1 billion in U.S. sales last quarter. Lantus loses patent exclusivity in 2015, and Lilly is among a host of players including Merck and Biogen lining up to battle for its business.
Fool-worthy final thoughts
Scripts are already rotating away from Byetta to Victoza and Bydureon, both of which offer a better dosing schedule. U.S. Byetta prescriptions fell 35% year-over-year in the fourth quarter, while Bydureon's prescriptions climbed 49%. Meanwhile, Victoza's North American sales increased by about 27% year-over-year for 2013. That suggests a healthy appetite for long-lasting GLP-1 drugs like dulaglutide, supporting some industry analyst forecasts for up to $1.5 billion in peak annual sales for the drug.
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The article Eli Lilly's Dulaglutide: The Same, But Better originally appeared on Fool.com.Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not own shares in the companies mentioned. Todd also owns Gundalow Advisor's, LLC. Gundalow's clients do not own shares in the companies mentioned.The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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