Lilly's high risk crashes

Oct/25/2007 06:55 Filed in: Pharma Business
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It ain’t good,” reads a headline in a note from Deutsche Bank’s Barbara Ryan. “With very limited information … this development can only be construed negatively,” she writes. She also suggests that Lilly’s plan to apply for FDA approval by the end of the year “will be delayed beyond the next few months, and potentially considerably longer.” This is just one analysts view of the latest setback for Lilly on their blood thinning drug that was in clinical trials. Lilly rolled the dice and decided to try and speed this drug to market but in douing so they have set it back potentially many years, that's right years !



You can bet that the FDA is soaking in every news story about two small trials of its experimental drug prasugrel. Lilly had hoped to use these small trials and submit an NDA this year but now it maybe required to do a large scale clinical trial costing millions of dollars and taking years to complete. Credit Suisse’s Catherine Arnold speculates that Lilly's Wednesday’s announcement could have been related to dosing problems in patients with impaired kidneys. If true, that could cut sales of the drug by 10%-20%, she writes. And she says the data to be presented next month will most likely show that Prasugrel is more effective than Plavix, but also more likely to cause problematic bleeding.


And so the risks of drug development once again come into a negative light. In addition to the Lilly announcement Bristol-Myers Squibb which has been trumpeting its push into oncology, said today that it won’t file for approval of a bladder-cancer drug in its pipeline.


From failure however there can come some good. The drug industry needs to highlight the cost of these setbacks to consumers and to the media. Wall Street of course is only interested in success not failure and does fully understand the risks of drug development or what a pipleine really means in terms of net present value. All they care about is the latest balance sheet not what lies in the long term future. Even is Lilly decides to move ahead with the development of their new drug they are already going to have to counter negative "buzz" with investors and physicians. This is hard to overcome and regradless it will cost a hell of a lot more to get this drug to market if that is it ever comes to market.
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