Eli Lilly and Company (LLY - Analyst Report) recently provided encouraging data on its diabetes candidate, dulaglutide. Dulaglutide is a long-acting glucagon-like peptide 1 (GLP-1) receptor agonist being developed as a once-weekly treatment for type II diabetes.
The company presented detailed safety and efficacy data from three phase III AWARD trials. Dulaglutide 1.5 mg was found to be superior to placebo and Bristol-Myers Squibb’s (BMY - Analyst Report) Byetta (exenatide), metformin and Merck’s (MRK - Analyst Report) Januvia (sitagliptin) in AWARD-1, AWARD-3, and AWARD-5, respectively, in the reduction of HbA1c levels.
Moreover, a higher percentage of patients in the dulaglutide arm achieved an HbA1c goal of less than 7% versus all active comparators. Patients in the dulaglutide arm also showed sustained weight loss during the course of the trials. While weight loss was significant compared to Januvia in AWARD-5, it was similar to Byetta and metformin in AWARD-1 and AWARD-3, respectively.
Hypoglycemia rates were also low in the dulaglutide arms. All these data were presented at the American Diabetes Association (ADA).
Eli Lilly had presented positive top-line data on dulaglutide from the AWARD-2 and AWARD-4 studies earlier this year.
Results from the AWARD program will be used to support dulaglutide regulatory filings, which are scheduled for this year.
Although we are encouraged with the data on dulaglutide, we note that the GLP-1 market is getting pretty crowded. While approved products include Novo Nordisk’s (NVO - Analyst Report) Victoza and Bristol-Myers’ Bydureon and Byetta, other big pharma companies also have GLP-1 candidates in late-stage development.
Eli Lilly currently holds 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.
Novo Nordisk currently looks attractive with a Zacks Rank #2 (Buy).