(Adds details about how Lilly disseminated the news beginning in the ninth paragraph.)
By Peter Loftus Of DOW JONES NEWSWIRES The U.S. Food and Drug Administration has declined to approve Eli Lilly & Co.'s (LLY) application to market a long-acting formulation of its antipsychotic Zyprexa, and has asked Lilly to submit a plan to ensure patient safety.
Lilly received a "complete response" letter from the regulator in December, according to an email that Lilly sent some analysts this week. Lilly Chief Executive John Lechleiter publicly disclosed the FDA letter at a Goldman Sachs investor conference in New York Wednesday.
Such letters typically mean the FDA isn't yet ready to approve a proposed drug. In Lilly's case, the FDA isn't requiring any additional clinical trials for the drug, according to Lilly's email, but rather wants Lilly to firm up a "risk evaluation and mitigation strategy." Such plans are generally designed to manage a known or potential serious risk associated with a drug, and can include medication guides, patient package inserts and other measures.
Lilly shares fell 95 cents, or 2.4%, to $38.62.
Currently, Zyprexa is usually given as a once-daily tablet to treat schizophrenia and bipolar disorder. The drug is a blockbuster, having generated $3.5 billion in sales for the first nine months of 2008.
The long-acting formulation would be injected once every four weeks. The product was approved in Europe last year under the brand Zypadhera. Analysts see more modest sales for the long-acting formulation, with Leerink Swann predicting annual sales of $125 million in 2011.
In February 2008, the FDA rejected Lilly's application for long-acting Zyprexa, saying it needed more information to better understand the risk and cause of excessive sedation events that were observed in about 1% of patients in clinical trials. An FDA advisory committee had previously concluded the drug would be safe and effective as long as doctors and patients were informed about the sedation risk.
Lilly submitted a formal response to the FDA's rejection last year. Following the complete response letter, Lilly plans to have discussions with the FDA and hopes to "get to the finish line," Lechleiter said. He said he couldn't speculate on the timing of further FDA action.
Lilly's method of disseminating the news may have raised some eyebrows. It sent the email about the complete response letter this week only to certain analysts. Goldman Sachs analyst Jami Rubin said at the conference that she was one of the analysts who had received the email.
The Lilly email said no press release was being issued about the news because the FDA action was "not deemed to be material to the company's current or future operations."
The U.S. Securities and Exchange Commission prohibits selective disclosure of material, nonpublic information to parties such as analysts or investors before disclosing such information to the general public. An SEC spokesman declined to comment Wednesday.
The FDA usually discloses only new drug approvals, but not rejections or delays. An FDA spokeswoman did confirm the Lilly complete response letter Wednesday after Lechleiter disclosed it at the Goldman meeting.
Lilly spokesman David Shaffer said Wednesday afternoon that the news wasn't material because it didn't meet certain thresholds of financial impact. Given Lilly's size, analysts' sales projections for long-acting Zyprexa indicate the product could account for a small percentage of total sales, if it is approved.
Nonetheless, following inquiries from Dow Jones Newswires, Shaffer said Lilly is planning to issue a press release about the FDA action late Wednesday because "we felt that the easiest and best way to get the information to everybody was simply to put it out over the wire."
-By Peter Loftus, Dow Jones Newswires; 215-656-8289; peter.loftus@dowjones.com
(Jared Favole contributed to this report.)
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Publié le 07 janvier 2009 Copyright © 2009 Dowjones