Who Suffers From Lilly's Evacetrapib Failure?
This article was originally published in Scrip
The latest failure of a cholesteryl ester transfer protein (CETP) inhibitor, this time Eli Lilly & Co.'s evacetrapib, likely marks the demise of the once-promising drug class. But while Lilly and fellow CETP sponsors Merck & Co. and Amgen Inc. are hurting, there’s a silver lining for others.
The failure of Lilly's highly anticipated cholesterol drug evacetrapib is unlikely to have a major impact on the big pharma's revenues – at least, that's what most analysts think – but does raise flags about the viability of the company's pipeline.
Lilly announced the morning of Oct. 12 that an independent data safety monitoring board recommended that it stop the Phase III ACCELERATE trial due to futility – meaning the 13,000-patient outcomes trial was not showing signs of efficacy at the interim analysis and was not worth continuing. There were no safety concerns associated with the decision, according to the firm.
ACCELERATE was meant to have a final read out in mid-2016 and was trying to show that evacetrapib could decrease the likelihood of major cardiovascular events like myocardial infarction and stroke by raising good HDL cholesterol and decreasing the bad LDL cholesterol.
While trials of evacetrapib have been largely positive, the industry has been particularly wary of the hypothesis that increasing HDL will lower risk of cardiovascular troubles – so far, there hasn't been much evidence produced to support this idea and several high-profile failures have indicated otherwise.
Investors, and Lilly, have held out hope for evacetrapib, but the drug has been a long shot. The CETP class has become notorious, taking hits both from failures of members of the class and from failed outcomes trials for other HDL-boosting drugs. Pfizer dropped development of the lead CETP inhibitor, torcetrapib, in 2006; the big pharma had been testing the drug in combination with its uber-blockbuster Lipitor (atorvastatin) in hopes of extending the life of the multi-billion dollar asset, but had to drop torcetrapib after the drug raised the risk of death.
Roche had a similar experience with its own CETP inhibitor in 2012, when it chose to discontinue development of dalcetrapib due to a lack of clinically meaningful efficacy. Dalcetrapib – like the other CETP inhibitors – all helped increase HDL cholesterol, but didn't improve cardiovascular outcomes.
The CETP class was once thought to be the next big thing in cholesterol, by significantly increasing HDL cholesterol, and a new source of blockbusters for the field – but as trials have been completed or terminated, confidence has waned. According to Citeline's TrialTrove database, there have been 144 completed or terminated industry-sponsored trials in the space, leaving only six ongoing late-stage trials.
The Implications
There are currently two other companies that could feel the hurt from Lilly's failure – Merck and Amgen.
Merck currently has its own CETP inhibitor, anacetrapib, in late-stage development and expects the results from its 30,000-patient cardiovascular outcomes study in early 2017.
Analysts from BioMedTracker had previously estimated that the drug had a 49% chance of approval, 2% higher than the average for the class, but that chance of approval was lowered to 32% on the Lilly news. Industry analysts have consensus peak revenue estimates of $1.2bn for the drug, but expect anacetrapib to be a smaller contributor to Merck's overall revenue picture.
Merck's shares dipped on the news initially, but recovered by the close of the market to trade near $50 per share. While a third failure in the class has cooled investors on the drug, there is still hope for anacetripib. Merck is studying the drug in a much larger patient population that is healthier than the patients in the evacetrapib trial.
"Does evacetrapib nail the coffin lid closed on CETP inhibitors? The reflexive answer is 'yes,' but another possibility is that ACCELERATE was an underpowered study," Sanford Bernstein analyst Tim Anderson wrote in an Oct. 12 note to investors. "The much larger size of MRK's trial leaves open the possibility that MRK's drug could still prevail. From here, anacetrapib becomes a 'freebie' if it were to work. If REVEAL is successful, they now have one less competitor to worry about."
While not as far along as Merck's anacetrapib, Amgen stands to lose plenty on the Lilly news. Amgen announced in mid-September that it has agreed to pay $300m in upfront payments to Dezima Pharma for its Phase II CETP inhibitor. The deal isn't expected to close until the fourth quarter and has $1.25bn in potential milestone payments tied to it. BioMedTracker now estimates the drug has an 8% likelihood of approval.
For Lilly, the failure of evacetrapib is a pretty big hit to the Indianapolis-based pharma's pipeline. While analysts weren't considering the drug a sure thing, they had projected peak sales of $2.5bn. The failure is more a hit to the morale of the company, which has been trying to show over the last two years that it can rebuild after several of its highest earning drugs lost patent protection.
"This unfortunate outcome for evacetrapib does not change our ability to generate long-term growth," said Lilly Chief Financial Officer Derica Rice. "Our recent string of positive data-readouts and our strong pipeline position us to grow revenue and expand margins through the remainder of this decade," he added in a statement.
Lilly will take a charge of $90m related to R&D costs, which will result in a decrease of 5 cents per share after taxes. The company will update its guidance further during its third quarter results on Oct. 22 and said it will release the full results of the ACCELERATE trial at a later date.
The failure of evacetrapib, and potentially the CETP class, will likely be a boon for several other companies who have recently garnered FDA approval of treatments for high cholesterol. The makers of the highly-talked-about PCSK9 inhibitors – Amgen, as well as Sanofi and Regeneron – all saw slight bumps in their stock prices on the news. The recently approved Repatha (evolocumab) and Praluent (alirocumab), respectively, are both injections that, although for a more limited population, would have faced some competition from the oral CETP inhibitors and could have potentially suffered due to the difference in administration, and cost.