The developer: Eli Lilly
The drug: ramucirumab
The scoop: Phase III failures at Eli Lilly ($LLY) are nothing new. The pharma giant won the gold medal for widely anticipated Phase III disasters last year with the Alzheimer's drug solanezumab. But its sunny-side-up self-evaluations and insistence that it has one of the biggest and best late-stage pipelines in the industry--chock-full of blockbuster potential--always satisfied most of the top-tier analysts covering the company.
The positive outlook was badly and perhaps irreparably damaged by the failure of its cancer drug ramucirumab in a Phase III study for breast cancer. Lilly execs, as always, came up beaming about its weak but positive outcomes for the drug in gastric cancer, a much smaller field. But this time around the glow was gone, and some longtime observers began to wonder aloud how long the litany of late-stage problems can continue before the company seriously addresses what ails its R&D group.
Lilly is one of the last holdouts in the Great Restructuring that has occurred in Big Pharma over the past 5 years. CEO John Lechleiter has consistently insisted for years that Lilly has the goods in its pipeline to overcome a nasty problem with generic competition. But with another key franchise facing the knockoff onslaught, it now has to actually deliver on its promise. Ramucirumab for breast cancer--a significant though by no means a leviathan prospect--finally raised serious doubts that Lilly's go-it-alone strategy can survive much longer.
Now it's up to the diabetes group to deliver on drugs like dulaglutide, which has looked promising in the Phase III data that Lilly has agreed to make public so far. For a company that is insulated from criticism and often dissed as one of the least desirable partners in the industry, another setback could solidify a sense that Lilly's long-shot approach to blockbusters and track record of steady failure over the past 3 years has run its course. Then it would find that as with AstraZeneca ($AZN), Merck ($MRK), Pfizer ($PFE), and Roche's ($RHHBY) pRED--among others--it's time for major surgery.
Lilly needs a string of clear wins to change the narrative now. It's losing control of the story line.
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