[Ip-health] Reuters: Lilly eyes entry into biogenerics arena

[Sarah Rimmington]

1. Reuters:  Lilly eyes entry into biogenerics arena, by Bill Berkrote
and Rans Pierson, Dec. 11, 2008

2. Reuters:  Lilly view provides relief, diabetes drug on track, by Rans
Pierson and Lewis Krauskopf, Dec. 11, 2008

[snip] At its analyst day in New York, Lilly touted the ImClone deal and
moves to improve research productivity as ways it is reshaping its
business as top medicines lose sales to generic competition in the
coming years.

But some analysts and investors contend the ImClone deal will not make
up for revenue lost to generic rivals, including Lilly's $4.8
billion-a-year schizophrenia drug Zyprexa, which faces U.S. generic
competition in October 2011. ...

The Indianapolis-based drugmaker expects three experimental cancer drugs
from the ImClone deal to be in late-stage testing next year. Lilly
outbid Bristol-Myers Squibb for ImClone, maker of the colon cancer drug
Erbitux.

After Merck & Co said earlier in the week it would develop generic
versions of biotechnology medicines, Paul said that such biogenerics are
"a very reasonable thing for Lilly to do -- probably down the road."

"It's certainly something that Lilly could do particularly well because
we could engineer proteins very well and improve their drug properties,"
said Paul, adding that Lilly is the fifth-largest biologics company in
the world. [snip]

http://www.reuters.com/article/rbssHealthcareNews/idUSN1138748320081211
Lilly eyes entry into biogenerics arena
Thu Dec 11, 2008
By Bill Berkrot and Ransdell Pierson

NEW YORK, Dec 11 (Reuters) - Two days after Merck & Co (MRK.N: Quote,
Profile, Research, Stock Buzz) announced a major push into generic
versions of biotechnology medicines, Eli Lilly and Co (LLY.N: Quote,
Profile, Research, Stock Buzz) on Thursday signaled similar aspirations
"down the road."

Lilly, which recently completed a $6.5 billion purchase of biotechnology
company ImClone Systems, told analysts and investors at its annual
meeting in New York that biogenerics were on its radar.

"We're very much considering it. It's something we're looking at. We'll
be opportunistic there," Lilly Chief Executive John Lechleiter said.

Biotechnology medicines, based on living organisms such as proteins and
antibodies, are far more complex and expensive to manufacture and
tougher to duplicate than traditional chemical pills. As a result,
generic versions will likely not be considered direct substitutes for
brand name drugs and are often referred to as biosimilars or follow-on
biologics.

The U.S. Congress has yet to approve a regulatory pathway for generic
biologic medicines, but many industry observers believe such a law could
be passed as soon as next year, following Europe's lead, as pressure
mounts to cut healthcare costs.

Merck said this week it expects to have at least five follow-on
biologics in late-stage development by 2012.

Lilly was not quite ready to make such a specific pronouncement, but its
biotechnology prowess should grow dramatically with the integration of
ImClone.

Steven Paul, president of Lilly Research Laboratories, told Reuters that
getting into biogenerics is "a very reasonable thing for Lilly to do,
probably down the road."

"It's certainly something that Lilly could do particularly well because
we could engineer proteins very well and improve their drug properties,"
Paul said. (Editing by John Wallace)


2. Lilly view provides relief, diabetes drug on track
Reuters, Thursday December 11 2008
By Ransdell Pierson and Lewis Krauskopf

* Sees 2009 EPS of $4-$4.25, with ImClone hit
* Sees ImClone deal dilution of 30-35 cents
* To seek OK for diabetes drug in 1st half of '09
* Shares rise 2 percent in early trade (Recasts, adds company comments,
updates shares)

http://www.guardian.co.uk/business/feedarticle/8143968

NEW YORK, Dec 11 (Reuters) - Eli Lilly and Co on Thursday predicted
earnings growth of as much 15 percent next year, excluding costs from
its ImClone Systems acquisition, relieving investors who feared negative
foreign currency trends would greatly undermine its results.

Lilly shares rose 2 percent in a down overall market as analysts also
expressed relief that Lilly would seek approval for a key diabetes drug
next year.

At its analyst day in New York, Lilly touted the ImClone deal and moves
to improve research productivity as ways it is reshaping its business as
top medicines lose sales to generic competition in the coming years.

But some analysts and investors contend the ImClone deal will not make
up for revenue lost to generic rivals, including Lilly's $4.8
billion-a-year schizophrenia drug Zyprexa, which faces U.S. generic
competition in October 2011.

Chief Financial Officer Derica Rice said in an interview that Lilly was
preparing for the post-Zyprexa period by improving productivity,
bringing down costs and replenishing its drug pipeline. The company
expects to launch two drugs per year starting in 2013, Rice said.

"Will we be able to replace Zyprexa dollar-for-dollar in the first 12
months? Maybe not," Rice told Reuters. "But do we have the opportunity
to grow post Zyprexa? Yes."
Lilly forecast 2009 earnings per share of $4 to $4.25, including a 30
cent to 35 cent hit from the ImClone acquisition, which was completed
last month.

Analysts on average expected $4.26 per share, according to Reuters
Estimates. Many analysts underestimated costs from the $6.5 billion deal
for the biotechnology company, according to Lilly.

But excluding costs from the ImClone deal, Lilly expects earnings of
$4.35 to $4.55 next year, which would equate to annual growth of 8
percent to 15 percent.

"It's mostly relief with the forecast," Miller Tabak analyst Les
Funtleyder said of the share-price rise, noting that Merck's forecast
was hurt badly by currency swings.
"There was a relief that things were not as bad as people thought,
especially for a not-expensive stock in a choppy overall market,"
Funtleyder said.

Analysts were also pleased that Lilly said it expects to seek approval
by the end of the first half of 2009 for its once-weekly version of its
diabetes drug Byetta, which is now injected twice a day.

Recent reports of pancreatitis associated with Byetta have hurt the drug
and clouded the prospects of the new version, which Lilly is developing
with Amylin Pharmaceuticals Inc.

To fill its void from patent expirations, Lilly is also counting on U.S.
approval of a blood-clot preventer called prasugrel, a potential
blockbuster that has been twice delayed by U.S. regulators. Lilly said
it remains in talks with regulators and anticipates launching the drug
next year.

Lilly also pushed back the timeline by two years for its experimental
lymphoma drug, enzastaurin, because the company is considering expanding
a late-stage clinical trial. It now expects to seek U.S. approval for
enzastaurin in mid-2013.

The drugmaker had hoped to start phase 3 trials for its NERI-IV drug for
depression and attention deficit hyperactivity disorder by the end of
this year, but the company is delaying the trial to find the appropriate
dose, Lilly's research chief Steven Paul told Reuters.

The Indianapolis-based drugmaker expects three experimental cancer drugs
from the ImClone deal to be in late-stage testing next year. Lilly
outbid Bristol-Myers Squibb for ImClone, maker of the colon cancer drug
Erbitux.

After Merck & Co said earlier in the week it would develop generic
versions of biotechnology medicines, Paul said that such biogenerics are
"a very reasonable thing for Lilly to do -- probably down the road."

"It's certainly something that Lilly could do particularly well because
we could engineer proteins very well and improve their drug properties,"
said Paul, adding that Lilly is the fifth-largest biologics company in
the world.

Lilly backed its long-term forecast of double-digit compound annual
earnings per share growth from 2007-2011.

Because of a huge charge from the ImClone acquisition, Lilly now expects
to post a loss of $1.56 to $2.06 per share for 2008. But, excluding
items, the company still expects 2008 earnings of $3.97 to $4.02 per share.

Shares rose 70 cents to $35.71 in early trading on the New York Stock
Exchange. (Reporting by Lewis Krauskopf and Ransdell Pierson; Editing by
Derek Caney, Steve Orlofsky, Dave Zimmerman)

--
Sarah Rimmington
Attorney
Essential Action, Access to Medicines Project
Washington, DC
Tel: (202) 387-8030
Cell: (202) 422-2687
www.essentialaction.org/access/