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Analyst Blog

Eli Lilly and Company recently presented data on Cialis at the annual European Association of Urology (EAU) Congress.

Results from a 26-week, randomized, double-blind, placebo-controlled study showed that once daily Cialis (5 mg) plus Merck’s Proscar (finasteride) improved scores significantly on the International Prostate Symptom Score (IPSS) in men with lower urinary tract symptoms of benign prostatic hyperplasia (LUTS/BPH) and enlarged prostates compared to placebo/Proscar alone.

Erectile function scores were also better in the Cialis plus Proscar arm compared to placebo/Proscar alone in men suffering from both LUTS/BPH and erectile dysfunction.

Cialis, which is approved for the treatment of erectile dysfunction as well as the treatment of BPH, posted sales of $1.93 billion in 2012. Cialis’ main competitors in the ED market include Viagra and Levitra.

The BPH market is also pretty crowded with products like Avodart, Jalyn, Uroxatral and Rapaflo among others.

Eli Lilly currently carries a Zacks Rank #3 (Hold). The biggest near-term challenge for Eli Lilly will be to replace the revenues that will be lost to generic competition now that Zyprexa has lost US and EU exclusivity. The generic threat will continue to pose challenges for Eli Lilly with Cymbalta slated to lose patent protection in late 2013 and Evista in 2014.

On the flip side, the Animal Health business and the diabetes franchise should provide some downside support. We are also pleased to see Eli Lilly pursuing small acquisitions and in-licensing deals to boost its pipeline.

Currently, large-cap companies like Novo Nordisk carry a Zacks Rank #2 (Buy). Avanir Pharmaceuticals, Inc. also looks attractive with a Zacks Rank #2.

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