In fresh setback, Lilly scuttles Ph3 teplizumab program

Eli Lilly was hit with its second big pipeline setback in two days as the big pharma company announced that its once-promising Type 1 diabetes drug teplizumab had flunked a Phase III study and that two other trials would be suspended. Eli Lilly licensed the drug back in 2007 from MacroGenics with a $41 million upfront and a billion dollars pledged for milestones. Teplizumab was MacroGenics lead drug and one of Lilly's most prized assets in late-stage development.

The news hit Eli Lilly just one day after the FDA rejected the application the pharma company had filed for Bydureon with Amylin and Alkermes, forcing a new trial and a delay that will stretch to mid-2012. And it raised fresh worries among analysts that CEO John Lechleiter's insistence on relying almost entirely on in-house R&D work left Lilly with dwindling development prospects as its big earners faced looming generic competition.

The decision to scuttle the ambitious round of trials came after the independent monitoring committee had concluded that the drug failed to hit the efficacy goal, a composite of a patient's total daily insulin usage and HbA1c level at 12 months. That triggered the decision to suspend dosing in another Phase III as well as an early-stage study that was under way. Teplizumab is an anti-CD3 monoclonal antibody.

"The failure to meet the primary endpoint is obviously disappointing for the millions of people who live with and treat type 1 diabetes," says Gwen Krivi, VP, product development for Lilly Diabetes. "Lilly and MacroGenics will be considering all options for teplizumab in type 1 diabetes as well as the impact of the DMC's recommendations on other potential indications."

- here's the Lilly release