“While it is difficult to predict the precise impact on Cymbalta sales, we expect the introduction of generics to result in a rapid and severe decline in our Cymbalta sales, which will have a material adverse effect on results of operations and cash flows,” Lilly lawyers wrote in the company’s third-quarter securities filing.
Next year, analysts expect Cymbalta’s sales to fall to as low as $1.3 billion. After Cymbalta’s exclusivity in Europe expires in August 2014, the drug’s sales could fall to as low as $700 million in 2015, according to analysts’ estimates.
After a very difficult 2014, Lilly’s sales are likely to start growing again in 2015, as the company brings as many as four diabetes drugs to market along with a potential blockbuster cancer drug called ramucirumab.
Lilly also continues to grow its Elanco animal health business rapidly. It has even been named as a possible buyer of Switzerland-based Novartis’ veterinary business.
Lilly’s sales in Japan and China continue to grow, albeit at slower rates than in recent years. And Lilly will rely on its sales force, which has been able to generate better-than-projected sales of such drugs as Tradjenta and Cymbalta.
“Given the still-skeptical view of LLY by the majority of investors, there is more ‘runway’ left should additional investors turn positive, which itself will be a function of LLY executing on various fronts, the most important of which is its pipeline,” wrote Bernstein Research analyst Tim Anderson in a Dec. 6 note to investors.
But it will likely be a long road back. Most analysts do not expect Lilly to match its 2013 revenue totals again until the year 2020. That’s because Lilly will see patents on its anti-impotence pill Cialis expire in 2017. And Lilly’s repeated pipeline failures, including its recent halting of its development of a new anti-depressant called edivoxetine, continue to scare investors and analysts.
“We are concerned that edivoxetine may be just one of more potential future failures to come from a pipeline that we view as lacking focus and discipline in terms of advancing assets into phase 3,” wrote Goldman Sachs analyst Jami Rubin in a Dec. 5 note to investors.
Eli Lilly and #$%$ Wednesday will fall off its second “patent cliff” in as many years as its best-selling drug Cymbalta sees its U.S. patents expire.
The ensuing loss of sales, as patients shift en masse to generic copies of the antidepressant Cymbalta, is well-known and is already included in the depressed price of Lilly’s shares.
But the loss of Cymbalta’s $5 billion in annual revenue means it’s now-or-never time for the Indianapolis-based company.
“Lilly represents an execution story, in our view,” wrote J.P. Morgan & Co. analyst Chris Schott after conversations with Lilly CEO John Lechleiter in November. Referring to Lilly by its ticker symbol, he added, “While we do not anticipate near-term outperformance for the stock, we could see a longer-term opportunity for LLY shares to the extent the company is able to successfully commercialize its next-generation product portfolio and maintain cost discipline over the next several years.”
Lilly will also see the patent on another blockbuster drug, the osteoporosis medicine Evista, expire in March. Evista is on pace for sales this year of just more than $1 billion.
Combined with the 2010 patent expiration of cancer drug Gemzar and the 2011 patent expiration of the antidepressant Zyprexa, Lilly will be suffering from the disappearance of more than $9 billion in annual revenue by the end of next year, according to analysts’ estimates.
A fifth drug, the insulin Humalog, also saw its patents expire in May 2013. But since there is no generic version of insulin on the market, its sales have been unaffected. Analysts expect that to remain the case for at least another few years
But the loss of Cymbalta sales is certain. Lilly expects Cymbalta’s U.S. sales, which exceeded $1.1 billion in the third quarter, to fall by more than half, to $500 million this quarter. That’s due to pharmacies working down their inventories and to returns that Lilly expects to receive after generic copies become available on Dec. 11
They got it right back in 1923 and they would have a marketing field day if they were the one's to introduce Afrezza to the world 90 years later.
Eli Lilly and Company
News of this miracle drug spread like wildfire, and diabetics rushed to be treated, clinging to hopes of relief.
To meet the growing demand, U.S. pharmaceutical company Eli Lilly and Company was given insulin manufacturing rights. Lisa E. Bayne, Senior Archivist at Eli Lilly and Company states:
Insulin would have remained nothing more than a breakthrough in theory, or at best, a treatment for a privileged few, had Lilly not found a way to manufacture the drug on a very large scale. Animal insulin was the first effective drug to treat patients with diabetes. In fact, insulin was the first life-saving drug in the world.
In the early 1980s, Lilly brought human insulin to the market. It was the world's first product human insulin and the first product made from recombinant DNA technology. Since then, we have further improved human insulin, offered better ways of administering it to patients, brought products to market that can delay the need for insulin in people with adult-onset diabetes, and studied new treatments for complications of the disease. We continue to search for a cure for diabetes, building on what we have learned and through partnerships with other companies as we have done since we introduced the first commercial insulin in 1923. (Bayne)