CHMP Backs Eli Lilly's Diabetes Drug

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Eli Lilly and Company (LLY) and partner Boehringer Ingelheim announced that their type II diabetes candidate, empagliflozin, has received a positive opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP).

The CHMP recommended approval of empagliflozin , an investigational sodium glucose co-transporter-2 (SGLT2) inhibitor, as an adjunct to diet and exercise to improve glycemic control in patients suffering from type II diabetes. A final decision should be out by May 2014.

In contrast, the U.S. Food and Drug Administration (:FDA) issued a Complete Response Letter (CRL) for empagliflozin earlier this month. In the CRL, the FDA mentioned that the deficiencies observed previously at the Boehringer Ingelheim manufacturing facility, where empagliflozin will be produced, have to be resolved in order to gain approval for the candidate. However, the FDA did not ask the companies to conduct additional studies. The companies are working with the FDA to submit a response to the CRL as soon as possible.

Our Take

We are pleased with the positive CHMP recommendation for empagliflozin considering several key products at Eli Lilly including Cymbalta and Zyprexa are facing stiff generic competition. A generic version of Evista will also be launched shortly.

However, if approved, empagliflozin will be a late entrant in the diabetes market, with other SGLT2 inhibitors like Johnson & Johnson’s (JNJ) Invokana and AstraZeneca’s (AZN) Forxiga already approved in the EU.

Eli Lilly carries a Zacks Rank #3 (Hold). A better-ranked stock in the pharma sector is Salix Pharmaceuticals Ltd. (SLXP) with a Zacks Rank #1 (Strong Buy).

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