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AbbVie (ABBV) will get some breathing room in rheumatoid arthritis after Eli Lilly (LLY) and Incyte's (INCY) drug was hit with delays by the Food and Drug Administration over the weekend, leaving Lilly to instead focus on a Pfizer (PFE)-rivaling breast cancer med.

On Friday, theFDA asked for more dosing information for Lilly and Incyte's rheumatoid arthritis drug, baricitinib, causing what could be a lengthy delay in its release. So Lilly'sbreast cancer drug known as abemaciclib is now especially important for Lilly, Leerink analyst Seamus Fernandez said.

Abemaciclib could compete against Pfizer's Ibrance and Novartis' (NVS) Kisqali in the CDK4/6 inhibitor market. These drugs aim to inhibit a specific set of enzymes thought to be tied to breast cancer.

"In our Lilly model, we are currently forecasting $1.5 billion global sales of abemaciclib by 2026 with the overall CDK4/6 market reaching more than $10 billion," Fernandezwrote in a note to clients.

Fernandez said abemaciclib could be the next major catalyst for Lilly's stock. Phase 3 data on abemaciclib is expected in June.

"We believe abemaciclib's ability to dose continuously together with a safe and manageable tolerability profile likely will make abemaciclib highly competitive with Novartis' Kisqali and provide opportunities to differentiate from Pfizer's Ibrance on secondary efficacy measures like response rate," Fernandez said.

The analyst kept his outperform rating and 91 price target on Lilly stock.

Lilly shares toppled as much as 5.6% on the stock market today, closing down 4.1% to 82.38, below its 50-day ling and a 83.34 buy point. Incyte stock tumbled 10.5% to 126.07.The delay on baricitinib means it likely won't get FDA approval until 2018 and launch until 2019. That removes a near-term rival for AbbVie's Humira. It also puts Lilly/Incyte seven to eight years behind Pfizer's Xeljanz, and more in line with generic-like competition.

Analysts expect the drug to be delayed at least a year, and shares of Lilly and Incyte toppled early Monday. Baricitinib already has been approved for use in Europe.

While baricitinib is likely delayed, Fernandez expects $1.7 billion in peak U.S. sales when it is approved. And Lilly still benefits from sales in Europe where the drug has attained approval.

IBD'S TAKE:IBD's 43-company Ethical-Drugmakers industry group has risento No. 150 out of 197 groups tracked from No. 184 just four weeks ago. Head to IBD Stock Checkup for a list of the top-rated drugmakers.

Other analysts agreed on the one-year delay for baricitinib, but were more cautious on Lilly's breast cancer drug. BMO analyst Alex Arfaei called abemaciclib "the biggest remaining uncertainty for Lilly in 2017."He sees the data as likely to disappoint.

"We still have not seen much data that would indicate CDK4/6 inhibitors are meaningfully differentiated," he wrote in a report. "Data from (the American Association for Cancer Research) 2017 suggests abemaciclib is not as selective as ribociclib (Kisqali) and Ibrance."

Arfaei cut his price target on Lilly stock to 71 from 73, though he maintained his forecast for 5% sales growth for Lilly in 2017 on its diabetesdrugs Trulicity, Jardiance and Basaglar, and psoriasis drug Talz.

These drugs "should offset the decline of mature franchises," he wrote. "However, from 2015-20, we forecast revenue compound annual growth rate of 4%, below Lilly's guidance of 5% partly because more conservative assumptions for the mature franchises."

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Eli Lilly could do better than its rivals in diabetes drug sales. (Jonathan Weiss/Shutterstock.com)

4:36 PM ET Eli Lilly is set to outperform bigger drugmakers Novartis and Sanofi in terms of first-quarter diabetes sales.

4:36 PM ET Eli Lilly is set to outperform bigger drugmakers Novartis and...

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Can Lilly Survive Rheumatoid Arthritis Flop With Breast Cancer Drug? - Investor's Business Daily

This entry was posted on April 18, 2017 at 7:44 pm and is filed under Arthritis. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed. |