Summary
Eli Lilly & Company (LLY) has announced the termination of its AIR® Insulin program, a Phase III development candidate for diabetes, in partnership with Alkermes, Inc. The decision was driven by increasing uncertainties in the regulatory environment and a re-evaluation of the product's commercial and clinical potential against existing therapies, rather than safety concerns. This discontinuation will result in a first-quarter 2008 charge to earnings estimated between $90 million and $120 million, or $0.05 to $0.07 per share, with approximately half requiring cash outlay. This charge, combined with a previously announced one related to BioMS in-licensing, impacts Lilly's 2008 earnings per share outlook, which is now projected to be in the range of $3.73 to $3.90. The company is managing the wind-down of clinical trials and will offer a patient assistance program in the U.S. to support current trial participants with medication costs through the end of 2008.
Key Highlights
- 1Termination of AIR® Insulin program (Phase III diabetes drug) in partnership with Alkermes, Inc.
- 2Decision driven by regulatory uncertainties and commercial/clinical re-evaluation, not safety issues.
- 3Expected first-quarter 2008 charge of $90 million to $120 million ($0.05-$0.07 per share) for asset impairment, wind-down, and patient assistance.
- 4Approximately 50% of the charge will be a cash expense.
- 5Revised 2008 EPS guidance to $3.73-$3.90, reflecting this charge and prior BioMS in-licensing charge.
- 6Clinical trials will be halted, and enrolled patients will be transitioned to other therapies.
- 7U.S. patient assistance program to cover medication costs for current trial participants through 2008.