Memorandum
Lilly announced a delay in the submission timeline for its novel basal insulin peglispro (BIL) on Monday morning in order to conduct additional safety studies evaluating the changes in liver fat observed in phase 3 trials. We assume chances are on the low side for the insulin to move through this process unscathed. The company now anticipates that FDA and EMA filings will not occur until 2017 at the earliest, though the exact timing will not be clear until the clinical trial plans are fleshed out. While we are certainly disappointed by the delay – regulatory filings were originally expected this quarter – we are not surprised since the insulin has been controversial ever since these findings emerged. Given the FDA’s fairly conservative perspective regarding safety signals, we think it’s hard to say much at all before the findings emerge. As a reminder, phase 3 trials of peglispro in type 1 and type 2 diabetes demonstrated potentially worrying increases in liver ALT enzymes, liver fat, HDL, and triglycerides with peglispro, though the efficacy results were quite impressive (consistently superior A1c reductions and advantages on weight and nocturnal hypoglycemia vs. Lantus). While there have been no cases of severe drug-induced liver injury (Hy’s Law) with peglispro in any of the trials, we will see what can be learned as Lilly moves ahead. As we have been saying for some time, peglispro has been shaping up as a high-risk, high-reward candidate. Even if the upcoming liver studies provide positive results, this delay may lead to a tougher regulatory review and will almost certainly call into question the candidate’s commercial prospects. Viewed from another angle, we believe this turn of events should allow Lilly to focus more on its biosimilar insulin glargine Basaglar/Abasaglar, which Lilly plans to market as a branded option – it will soon arrive on the market in Europe although it is on hold in the US due to a Sanofi lawsuit. Full phase 3 results for peglispro are slated to be presented at ADA in June and should offer the most complete picture to date of the drug’s risk/benefit profile.