Lilly heralds a lung cancer victory for blockbuster hopeful ramucirumab

After a high-profile breast cancer failure bit into its potential sales forecasts, Eli Lilly's ($LLY) ramucirumab aced a Phase III study in lung cancer, renewing hopes that the star of the drugmaker's oncology pipeline can still deliver on its promise.

In a late-stage study on more than 1,200 patients with non-small cell lung cancer, a combination of ramucirumab, chemotherapy and docetaxel improved overall survival and had a statistically significant effect on progression-free survival, meeting its primary endpoint, Lilly said. As is common, the company is keeping specifics under wraps until it can take the stage at a scientific conference.

The positive lung cancer results are a huge step in the right direction for Lilly's expansive, expensive and much-scrutinized ramucirumab program. Last year, the drug failed to meet its primary endpoint in a Phase III breast cancer trial, dashing hopes for an indication that could have brought in as much as $600 million, analysts said. The VEGF blocker hit its OS and PFS marks in two gastric cancer studies, but that silver lining didn't do much to deflect the mounting pessimism surrounding the drug.

But now ramucirumab is heading into a make-or-break 2014 with some good news. The lung cancer study was the first of its three Phase III trials expected to report out this year, joined by studies in liver and colorectal cancers. If ramucirumab can run the table, Lilly will head to the FDA with four potential indications and a treatment that could top out at $1.3 billion a year, according to Leerink.

Bernstein analyst Tim Anderson figures ramucirumab will pick up its first FDA approval next year, and he believes a lung cancer indication could mean $1 billion in sales on its own, sending the drug's peak sales well into blockbuster territory if Lilly can deliver on a wider label. And ISI's Mark Schoenebaum agrees, writing in a note to investors that ramucirumab could top out at $2 billion. 

The drug is part of a late-stage trio Lilly CEO John Lechleiter expects will win near-term approvals and steer his troubled company into a post-patent-cliff future. Ramucirumab is joined by dulaglutide, a GLP-1 diabetes treatment that could eventually lead a crowded market, and necitumumab, a lung cancer treatment designed to succeed Erbitux. And there's no shortage of immediacy: Top seller Cymbalta is contending with generic competition, and Evista is slated for the same fate come March.

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