Shorter Path to Market
Eli Lilly & Co. announced on August 17 that it will split its Lilly Bio-Medicines division into two business units: Lilly Neuroscience and Lilly Immunology, effective September 5, reported Tonya Garcia in MarketWatch. Splitting Lilly’s division that develops and markets drugs for neurology and inflammatory diseases into two appears to be related to an anticipated shorter path to market for the company’s experimental Alzheimer’s treatment donanemab, according to Jonathan Gardner of Biopharma Dive.
Anne White, currently president of Lilly Oncology, will lead Lilly Neuroscience. She is responsible for launched products and the unit’s phase 3 portfolio in pain and neurodegeneration, including the potential launch of donanemab. Loxo Oncology at Lilly Chief Executive Jacob Van Naarden will now add president of Lilly Oncology, merging these business units. Patrik Jonsson will be president of Lilly Immunology, leading launched products and the phase 3 portfolio in dermatology, gastroenterology and rheumatology. He will also serve as president of Lilly USA and chief customer officer.
Lilly International President Alfonso Zulueta will retire at the end of 2021 after more than 30 years. Ilya Yuffa, president of Lilly Bio-Medicines, will assume that role for all markets outside of the U.S. except for Canada.
According to Gardner, “The reorganization is a sign of Lilly’s diversification and growth beyond its core diabetes business into the fast-moving fields of cancer, immunology and neurology. The pharma has placed some particularly big bets in Alzheimer’s disease, with hopes that drug candidates donanemab and zagotenemab could join Biogen’s Aduhelm as treatments for the neurological disorder.”
He added, “After numerous setbacks in Alzheimer’s disease, Lilly has high hopes for a breakthrough with donanemab. When the FDA controversially approved Biogen’s Aduhelm in June, it set a precedent for other drugs that can effectively remove amyloid lesions in the brain — believed, but not proven, to be the cause of the neurodegeneration that characterizes Alzheimer’s. Donanemab has been shown in testing to similarly clear those amyloid plaques. While the company had expected to need to conduct Phase 3 trials to prove treatment can delay cognitive and functional decline, the FDA decided to grant accelerated approval to Aduhelm on the basis of its ability to remove amyloid from the brain. Following that decision, Lilly changed course and decided to pursue accelerated approval of donanemab. The company expects to file an application with the Food and Drug Administration later this year.”
If FDA accepts Lilly’s application and approves donanemab, Lilly will have a dedicated neuroscience division to support the drug. Although the pharma giant has a long history in the space, it has only recently begun to rebound from a series of patent expirations with the 2018 approval of the migraine medicine Emgality. At the same time, Lilly’s immunology division is growing quickly because of to the psoriasis treatment Taltz. The division could become even bigger if lebrikizumab and mirikizumab — experimental drugs for eczema and psoriasis — succeed in the clinic and with regulators. Ronny Gal, an analyst at Bernstein, said that Lilly immunology sales could more than double from $2.4 billion in 2020 to $6.1 billion in 2025.
Thus, separating the divisions could enable company leaders to focus on maximizing the sales of new products. According to CEO David Ricks, “These leadership and organizational changes will allow us to realize the many opportunities we have to improve the lives of people around the world.”
Merging Lilly’s cancer efforts into one division reflects the end of a successful experiment that had executives of Loxo Oncology, which Lilly acquired for $8 billion in 2019, revitalize Lilly’s cancer research and development. Van Naarden assumed leadership of the Loxo at Lilly unit earlier this year with the departure of the Loxo’s former CEO, Josh Bilenker, to a startup called Treeline Biosciences.
Eli Lilly shares have soared nearly 60% in 2021 while the benchmark S&P 500index SPX, +0.81% has gained 19.3% for the period.