Drugmakers Eli Lilly and Pfizer Trade Lower Despite Good News

Andrew Klips |

Monday News Sends Drug Makers Eli Lilly and Pfizer LowerThe broad markets are continuing their descent started late last week and not even positive drug data for Eli Lilly & Co. (LLY) or acquisition news for Pfizer, Inc. (PFE) is sparing the big drug manufacturers from the joining the decline.

Lilly said that data collected during its Phase III trials for GLP-1 agonist dulaglutide, a once-a-week treatment for type 2 diabetes, showed the drug to be effective in lowering blood glucose levels. The research was conducted in varied lengths – ranging from 26 to 105 weeks – measuring the injectable dulaglutide for glycemic control against twice-daily injections of exenatide and the oral treatments metformin and sitagliptin.

Pending meeting FDA guidelines related to cardiovascular risk, Lilly, the world’s 11th largest drugmaker by annual revenue, plans to file its New Drug Application for dulaglutide in 2013.

The good news comes after Lilly reported last week that its experimental cancer compound met its primary goal in a trial with stomach cancer patients. Overall, it can mean good things are possibly ahead for Lilly who, along with many other major pharmas, has felt the sting of the patent cliff, including it losing protection for its antipsychotic drug Zyprexa. The Indianapolis-based company reports third quarter earnings on Wednesday.

Shares have tracked lower in today’s trading by 1.4 percent to $59.12 with the trading day starting to wind down. Pfizer said Monday that it will lighten its pocketbook by up to $700 million to buy privately-held NextWave Pharmaceuticals Inc. The main motivation for Pfizer is to acquire NextWave’s Quillivant XR, the first once-daily, extended-release formulation of liquid methylphenidate for deficit hyperactivity disorder drug that garnered FDA approval in September. The new drug is slated to be commercially available in January.

NextWave is also in late stages of development for an extended release chewable tablet using the same drug. The company is planning on filing for marketing approval next year.

The deal is not exactly new as Pfizer initiated a merger agreement earlier this year with a $20 million option payment. Now exercising that option, the world’s biggest drug maker will be paying another $255 million at the closing of the transaction (anticipated in the fourth quarter, pending approvals) with a pact to pay an additional $425 million upon sales milestones being met.

Pfizer has also seen sales take a hit because of key drugs coming off patent, including anti-cholesterol Lipitor losing protection last year.
Shares have stumbled 1.13 percent lower so far today, trading at $25.47.

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Companies

Symbol Name Price Change % Volume
LLY Eli Lilly and Company 81.16 -0.13 -0.16 2,197,653
PFE Pfizer Inc. 34.26 0.11 0.32 12,937,101
REXI Resource America Inc. n/a n/a n/a 0

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