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Regulatory Setback for Eli Lilly

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Eli Lilly and Company (LLY) and partner Boehringer Ingelheim suffered a regulatory setback with the U.S. Food and Drug Administration (:FDA) issuing a Complete Response Letter (CRL) for their New Drug Application (:NDA) for empagliflozin, investigational sodium glucose co-transporter-2 (SGLT2) inhibitor. Eli Lilly and Boehringer Ingelheim are looking to get the candidate approved for the treatment of type II diabetes.

The FDA mentioned in the CRL 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. Importantly, the agency did not ask the companies to conduct additional studies.

Eli Lilly and Boehringer Ingelheim said that they are working with the FDA to submit a response to the CRL and resolve the issues mentioned in it.

The delay in FDA’s decision on empagliflozin, while disappointing, is not really surprising as the Boehringer Ingelheim manufacturing facility had already received a warning letter from the FDA and chances remained that this would delay the approval of empagliflozin.

However, Eli Lilly needs to bring new products to market considering key products like Cymbalta and Zyprexa are facing stiff generic competition. A generic version of Evista will also be launched shortly. Meanwhile, SGLT2 inhibitors like Johnson & Johnson’s Invokana (JNJ) and AstraZeneca’s (AZN) Farxiga will get a head start in the type II diabetes market.

Eli Lilly carries a Zacks Rank #3 (Hold). A better-ranked stock in the pharma sector is Novo Nordisk (NVO) with a Zacks Rank #2 (Buy).

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