Lilly: Jardiance Label To Add Cardiovascular Indication

Eli Lilly & Company (NYSE:LLY) recently announced that the FDA has approved the inclusion of cardiovascular (CV) risk reduction data from the EMPA-REG OUTCOME study on its type II diabetes drug Jardiance’s (SGLT-2 inhibitor) label.

Jardiance was approved in 2014 for lowering blood sugar in adults with type II diabetes. Now, the FDA has approved a new indication for the drug to reduce the risk of cardiovascular death in adults with type II diabetes. We remind investors that Lilly and its partner, Boehringer Ingelheim, received a positive FDA panel recommendation in June for the inclusion of this data.

It remains to be seen if the company’s stock reverses the decline following the negative solanezumab news announced last month. On Nov 23, Lilly announced that its high-profile investigational Alzheimer’s disease drug, solanezumab, failed to meet the primary endpoint in a late-stage study. With the failure, Lilly decided to drop the development of solanezumab. The stock declined sharply on the news and hit a 52-week low on the same day.Lilly’s share price has declined 9% in the past one month. The decline in share price compares unfavorably with a decrease of 1.3% witnessed by the Zacks classified Large-Cap Pharma industry.

Coming back to the latest news, cardiovascular disease is very common in adults with type II diabetes. With about 50% of the deaths in type II diabetics globally resulting from the CV disease, the addition of this data to Jardiance’s label is expected to improve sales of the drug. Jardiance recorded sales of $47.5 million in the last reported third quarter of 2016.

The landmark EMPA-REG OUTCOME trial showed that irrespective of the type of cardiovascular disease at baseline, Jardiance tablets reduced the risk of cardiovascular death in adults with type II diabetes and established cardiovascular disease compared to placebo when added to standard of care.

The EMPA-REG OUTCOME trial was carried out on more than 7,000 patients, from 42 countries, with type II diabetes and cardiovascular disease. It is regarded as the first long-term trial of a diabetes medication to show a reduction in cardiovascular death in adults with type II diabetes and established cardiovascular disease.

Other diabetes drugs in Lilly’s portfolio like Glyxambi and Synjardy could also benefit as both belong to the Jardiance family.

The new indication is expected to give Lilly a competitive advantage over the other oral type II diabetes medicines. The diabetes market is pretty crowded given the presence of companies like Novo Nordisk (CO:NOVOb) A/S (NYSE:NVO) , Johnson & Johnson (NYSE:JNJ) and Merck & Co. Inc. (NYSE:MRK) .

Lilly carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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