Analyzing Eli Lilly’s Clinical and Business Developments in 1Q16



Other developments

We discussed Eli Lilly’s (LLY) corporate developments and regulatory developments during 1Q16 in the last part of the series. In this article, we’ll discuss other developments including clinical and business developments during 1Q16.

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Clinical developments

The clinical developments during 1Q16 were:

  • Eli Lilly and AstraZeneca (AZN) announced that the Amaranth study will continue to phase three. The study involves AZD3293, an oral BACE inhibitor used to treat patients with early stages of Alzheimer’s disease.
  • Amendments for Expedition3 trials that evaluated solanezumab for the use in the treatment of mild Alzheimer’s disease were announced. As per the amendments, the study will include a single primary endpoint of cognition while the functional outcomes will be evaluated as secondary endpoints.
  • Two new clinical trials were announced for Jardiance, a diabetes drug, for the treatment of patients with chronic heart failure. The clinical trials will be in collaboration with Boehringer Ingelheim.

Business developments

The business developments during 1Q16 were:

  • Elanco, the animal healthcare arm of Eli Lilly, received exclusive and global rights to develop and commercialize Aratana’s (PETX) Gallipart, a drug for the treatment of osteoarthritis in dogs. For the US markets, Gallipart will be co-promoted by Aratana and Eli Lilly.
  • Graft-versus-host disease (or GVHD) is a rare disease where the patient receives bone marrow cells or tissues from the donor during an allogeneic bone marrow or stem cell transplant. In order to provide Incyte Pharmaceuticals (INCY) the rights to develop and commercialize the drug Jakafi for the treatment of GVHD, the company modified its existing agreements for baricitinib. However, Eli Lilly retained all rights to develop and commercialize baricitinib for the treatment of patients with GVHD.
  • Eli Lilly repurchased ~$300 million of its stock in 1Q16. $2.7 billion repurchases remain as per the $5 billion repurchase plan.

Investors can consider ETFs like the Vanguard Healthcare ETF (VHT), which holds ~2.2% of its total assets in Eli Lilly, ~6.1% of its total assets in Pfizer (PFE), ~3.8% of its total assets in Amgen (AMGN), and ~3.1% of its total assets in AbbVie (ABBV). Investors can also consider the iShares Morningstar Large Value ETF (JKF), which holds ~1.7% of its total assets in Eli Lilly, in order to divest company-specific risk.


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