On Friday, Eli Lilly and Co said that its new cancer treatment did not improve patient survival in a long-term confirmatory study. While the medication, Lartruvo, did win conditional approval, the drugmaker will no longer prescribe the product. Indeed, no new patients will start this drug regimen as Lilly is suspending any promotions for the medicine.
This, of course, did not make investors happy, and shares fell 3 percent.
Again, Lartruvo won approval—and an accelerated one at that—in 2016 in the United States, as well as conditional approval by the European Medicines Agency, based on early results from a very promising mid-stage trial. Continued approval, however, was dependent upon the results that would come out of a larger, late-stage trial confirming any benefits for the drug.
Out of the latest tests, Lilly said that Lartruvo, when combined with chemotherapy doxorubicin (the present standard-of-care) did not show any promise to prolong survival any more than doxorubicin alone among patients diagnosed with advanced soft tissue sarcoma.
Sarcoma, of course, is a relatively rare type of cancer which typically develops within the body’s connective tissues. This means you can develop sarcoma in the bones, the muscles, the nerves, and/or the blood vessels. Lilly says that while they are no longer promoting the drug to new patients, those who appear to be benefitting from it can continue to take it.
This news is a big setback for Eli Lilly, as Lartruvo was expected to pull in more than $374 million in 2019. Furthermore, Eli Lilly said, last week, it had plans to acquire Loxo Oncology Inc for $8 billion in order to expand its strong presence in the growing—and quite promising—oncology medicine market.
And with that, the company said it will likely take a first-quarter charge—because of Lartruvo—somewhere between $70 million and $90 million (pre-tax). This equates to about 10 cents per share (after tax). Accordingly, Lilly also said it expects the failure of these trials to impact shares by about 17 cents per share on its full-year 2019 earnings forecast. At the same time, the company says it does not expect a change to its forecast for 2020’s minimum financial goals.