Eli Lilly and Company (LLY) and partner Boehringer Ingelheim gained tentative FDA approval for their diabetes treatment, Basaglar (insulin glargine injection). The companies are looking to get the drug approved for improving glycemic control in adults with type II diabetes and in combination with mealtime insulin in adults and pediatric patients with type I diabetes.
Basaglar, which has been filed under the FDA's 505(b)(2) regulatory pathway, has the same amino acid sequence as Sanofi’s (SNY) Lantus (insulin glargine). Sanofi has filed a patent infringement lawsuit against Eli Lilly and Boehringer. As a result, the FDA cannot grant final approval until the end of the 30-month stay period in mid-2016 or a favorable court ruling, whichever occurs first.
Although Basaglar has the same amino acid sequence as Lantus, it will not be treated as a biosimilar in the U.S. However, in other markets like Europe, it will be treated as a biosimilar. We note that earlier this year in June, Eli Lilly-Boehringer's insulin glargine product received a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) in the EU. Approval should come shortly.
We are encouraged by Eli Lilly’s progress with its diabetes pipeline. Earlier this month, the FDA approved another diabetes drug developed under the Eli Lilly- Boehringer collaboration. Jardiance (empagliflozin), a sodium glucose co-transporter 2 (SGLT2) inhibitor, gained approval in the U.S. for the treatment of type II diabetes. It is already approved in the EU.
Eli Lilly is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the pharmaceutical sector include Allergan (AGN) and AstraZeneca plc (AZN). While Allergan is a Zacks Rank #1 (Strong Buy) stock, AstraZeneca is a Zacks Rank #2 (Buy) stock.