Lilly projects seven new blockbusters for 2008
Lilly says seven drugs will hit billion-dollar levels next year, but uncertainty clouds future of experimental heart drug prasugrel.
NEW YORK (CNNMoney.com) -- The drugmaker Eli Lilly & Co. reaffirmed its 2007 earnings outlook and said that seven of its drugs will hit billion-dollar blockbuster levels in 2008, but uncertainty over the experimental heart drug prasugrel continues to dog the company.
Lilly reconfirmed 2007 guidance of $3.50 to $3.55 in adjusted earnings per share for full-year 2007, and projected earnings per share of $3.85 to $4 in 2008 with sales growth in the mid-to-high single digits.
Lilly's (Charts, Fortune 500) stock edged up 1 percent on the news.
The Indianapolis-based company said that sales in 2008 will be driven by seven drugs that will attain, or have recently attained, blockbuster status, including Zyprexa for schizophrenia and bipolar disorder, the anti-depressant Cymbalta, Evista for osteoporosis, Gemzar for lung, pancreatic and bladder cancer, the diabetes drug Byetta, the sexual dysfunction treatment Cialis and the insulin product Humalog.
The drugmaker also promised six new product launches by the end of 2011 and said there are 44 drugs in development, a number that Dr. Steven Paul, executive director of science and technology, called "unprecedented."
But the centerpiece of Lilly's up-and-comers, an experimental anti-clotting drug called prasugrel, faces an uncertain future.
In November, Lilly announced late-stage test results for prasugrel showing that it worked better than Bristol-Myers Squibb's (Charts, Fortune 500) anti-clotting drug Plavix, but its problems with bleeding were worse. Lilly has stood by prasugrel and plans to file it to the Food and Drug Administration early in 2008.
Speaking to a gathering of analysts of Thursday, chief executive Sidney Taurel said "the benefit of prasugrel clearly outweighs the risk." But he also said that the FDA's rigorous scrutiny of experimental drugs and "black box" warnings "suggests a focus on drug safety almost exclusive of benefit."
Lilly's studies show that prasugrel appears to be more beneficial in some groups, like diabetics and stent patients, than others, like stroke survivors and patients with low body weight.
"If you have a prior history of stroke, based on what we know, [prasugrel] would not be a good medicine for you," said Dr. Anthony Ware, vice president of Lilly research laboratories and leader of global brand development. "The stroke survivors had bleeding and they certainly didn't benefit from prasugrel."
But on the other hand, Ware said the drug would not be targeted specifically as a treatment for diabetics, even though the risk-benefit profile seems to be particularly beneficial for them. Taurel, the CEO, said his company will pursue a broader patient population.
Analysts have differing opinions as to whether it will get a green light from regulators, and were hesitant to provide estimates on sales.
"It's not a slam dunk, but I believe there's enough there to get approval," said Robert Hazlett, analyst for BMO Capital Markets. "If approved, we think it will be widely considered given its profile in certain groups."
But Michael Krensavage, analyst for Raymond James, doesn't believe the FDA will approve prasugrel without more information demonstrating effectiveness in specific groups of patients.
"Lilly is trying to dredge data to its advantage and you run into problems when you do that," said Krensavage. "I believe the company will have to conduct another trial to show that it can prevent bleeding."
Chris Schott, analyst for Bank of America, said, in a published note, that he expects "eventual approval" of prasugrel, but "the risk of it not receiving an '08 approval will keep Lilly shares range-bound in the mid-50s in 2008."
Lilly also expressed its high hopes for its experimental inhaled insulin device, called AIR, despite Pfizer & Co.'s (Charts, Fortune 500) failed launched of the inhaled insulin product Exubera.
"We clearly have gone to school on Pfizer's experience and we'd be in trouble if we didn't," said Bryce Carmine, Lilly's president of global product development. He said that AIR -- which has been compared in size to an iPod or Magic Marker - is less complicated and more convenient to use than Exubera.
Hazlett of BMO expects Lilly to submit AIR to the FDA in 2009, and said it could eventually reach $500 million in annual sales.
Unlike other members of Big Pharma, Lilly did not announce aggressive plans for future job cuts, but said it had already reduced 11 percent of its work force, or 5,000 jobs, since 2004.
The analysts interviewed for this story do not own Lilly stock.