R&D budget: $5.307 billion
Change from 2017: -1%
Total 2018 revenue: $22.87 billion
R&D budget as percentage of revenue: 23.2%
In the first week of 2019, Eli Lilly announced an $8 billion buyout of ASCO darling Loxo Oncology in a deal that gives the Indianapolis Big Pharma TRK inhibitor Vitrakvi, the first drug approved by the FDA to target tumors according to a genetic abnormality rather than the location of the cancer.
While longer-term partner Bayer kept hold of the rights to some of Loxo’s older experimental drugs, Lilly still got access to three targeted cancer drugs, including a follow-up TRK inhibitor, an oral BTK inhibitor and a RET inhibitor, LOXO-292, which has received breakthrough therapy designation from the FDA in some patients with RET thyroid cancer and non-small cell lung cancer.
That was a nice start to 2019, but 2018 was something of a mixed bag for the company R&D-wise. The low points were when it (and partner AstraZeneca) dropped phase 3 trials of BACE inhibitor lanabecestat in Alzheimer’s disease in June, and later in November when it dropped work on another, earlier-stage BACE inhibitor, though few details were forthcoming.
Over the years, Lilly has told me of its pride in continuing work in AD, but these terminations and failures came as no surprise to even the most casual observer of Alzheimer’s R&D, and specifically attempts to use BACE inhibitors, and the underlying amyloid theory, to halt the memory-wasting disease.
Eisai, Biogen, Merck, Pfizer and Janssen have all been hit by similar issues in testing their AD drugs, but it still hits hard when a key phase 3 drug fails to hit its goals and gets dropped; hence why Lilly went for a deal with an oncology player, and not a CNS one, earlier this year.
But that’s not to say Lilly is backing away from spending in this area: In December last year, it paid the small sum of $81 million to AC Immune, a Swiss-based preclinical outfit, for rights to its tau aggregation inhibitors in Alzheimer’s (tau being the second current theory in AD after amyloid), as it looks for a different path to a possible, but still highly elusive, clinical success in AD.
Oncology R&D, however, remains a solid focus for its pipeline, and in May, Lilly put $1.6 billion on the table for Armo Biosciences and its lead asset, pegilodecakin, which has shown promise both as a single agent and in combination treatments for multiple tumor types.
Pegilodecakin, a discarded Merck drug, is a PEGylated form of anti-inflammatory cytokine IL-10 and is currently in a phase 3 trial in another disease that has almost wall-to-wall clinical failures, pancreatic cancer. But it also has other shots on goal in the clinic for lung and renal cell cancer, melanoma and other solid tumor types.
This deal was complemented in November with Lilly’s $25 million upfront pact with NextCure, which gave the company a source of antibodies against new cancer targets.
2018 also saw the outgoing and incoming presidents of Lilly Research Laboratories: Jan Lundberg, Ph.D., and Dan Skovronsky, M.D., Ph.D., respectively.
In March in a conversation with analysts, Skovronsky made it clear that Lilly didn’t just want a “pile-on” approach to cancer—i.e., adding a checkpoint inhibitor to the mix because that’s what everyone else is doing—but a differentiated strategy.
In a conversation with analysts at Bernstein, he also said that Lilly had a chance to be the first to win approval for drugs aimed at a clutch of exciting targets, including CDK 4/6, IL-17, IL-23, PCSK9 and CGRP. But instead of quickly advancing the programs out of its labs and into the clinic, Lilly hesitated, allowing rivals to leapfrog it and in some cases force it out of the race altogether.
That is something he wants to end: to have better and quicker decisions made around its pipeline and kill off any drugs that look like they won’t make the cut. Skovronsky diagnosed the problem as stemming from Lilly being too slow to take the assets into human testing. The new research chief wants that tentative approach to end on his watch.
“We want to be the first testing novel mechanisms. You should see more Lilly phase 1 trials and proof-of-concept trials on novel mechanisms,” he said.
We’ll see this year just how much that philosophy comes into force.