Eli Lilly drug sales fall short

Eli Lilly’s promising diabetes drug Jardiance fell short last quarter, a sign of the major challenges ahead for its new chief executive officer after recent setbacks on other potential new treatments.

Jardiance’s first-quarter sales, at $74m (€68m), were well below the $93.6m average of analysts’ estimates. The shares dropped 2.6% at one stage in New York.

For new CEO David Ricks, who succeeded John Lechleiter at the start of the year, 2017 is shaping up as more challenging than might have been expected a few months ago.

Jardiance’s shortfall may be further evidence of the price pressure manufacturers of diabetes treatments are facing.

And after the recent experimental setbacks, Lilly is more reliant on existing treatments to fuel future growth.

Two other new treatments, cancer drug Cyramza and diabetes treatment Basaglar, also came in lower than predicted last quarter.

However, there were some bright spots in the results. Jardiance is still growing fast, with sales doubling in the first quarter.

Insulin product Trulicity gained market share and skin treatment Taltz surpassed estimates.

“As we return to growth, we’re really counting on strong performance from our new products,” said Mr Ricks. “We’re riding those to success.”

Diabetes has long been part of Lilly’s strategy: Its top-selling product is insulin drug Humalog. But immunology and oncology are central to the company’s future, the CEO said.

Pressure on diabetes drugs’ prices has been hitting pharmaceutical companies recently, and Johnson & Johnson reported a sales slump for its Invokana last week.

Still, the disease remains a major source of revenue for drug makers, and analysts expect Lilly’s Jardiance to become a blockbuster, surpassing $1bn in sales by 2019.

Top-selling Humalog helped boost revenue with sales rising 17% to $708m, higher than the average of analysts’ predictions. For the full year, the company revised earnings-per-share forecasts to include severance expenses.

This month, the US Food and Drug Administration rejected a rheumatoid arthritis treatment Lilly is developing in partnership with Incyte, and requested more evidence about dosage and potential safety concerns.

Bloomberg