Eli Lilly & Co. (LLY): Cancer Breakthrough Could Mean Big Gains for This Pharma Giant

Page 1 of 2

The battle against cancer is both valiant and frustrating. Medical researchers are constantly developing new drugs and treatment methods to fight the dreaded disease, and while most improvements come gradually, the really big progressive leaps in treatment are few and far between.

Pharmaceutical giant Eli Lilly & Co. (NYSE:LLY) announced today what it suspects could be one of those big leaps forward in the battle against one of the most prolific and pernicious varieties of the disease — lung cancer.

In a press release, Eli Lilly & Co. (NYSE:LLY) announced impressive clinical trial results for SQUIRE, the company’s recently completed Phase III clinical study. The study found that “patients with stage IV metastatic squamous non-small cell lung cancer experienced increased overall survival when administered necitumumab in combination with gemcitabine and cisplatin as a first-line treatment, as compared to chemotherapy alone.”

A positive result in a Phase III study, which is one of the critical hurdles before a drug is approved, is a big reason for optimism in patients afflicted with this variety of lung cancer. It’s also a big positive for Lilly, as the mass adoption of an effective new therapy means millions in revenue for many years down the line.

Certainly, traders viewed the news as a big positive, as Eli Lilly & Co. (NYSE:LLY) shares spiked 4.4% in pre-market trade before giving back some of those initial gains.

This news comes at the right time for Lilly, as the company is facing the patent expiration of several of its most profitable drugs, including its best-selling drug, antidepressant Cymbalta. Patent expiration on Cymbalta happens later this year, and that will undoubtedly result in much less revenue from the product in 2014.

As for necitumumab, the therapy still faces regulatory challenges, although nothing more than the usual approval process. The company plans to submit necitumumab to regulators for approval before the end of 2014, and while that may seem like a long time from now, in drug approval terms it’s just around the corner.

Interestingly, the thing that got Wall Street excited about the Lilly announcement on Tuesday was its unexpectedness. ISI Group analyst Mark Schoenebaum, who covers the stock, reflected on the analyst community’s surprise over the news.

In an email note to clients, Schoenebaum wrote, “This is a clear upside surprise, as consensus (and my) expectations for this drug were basically zero.” He added, “Recall that Bristol-Myers Squibb actually RETURNED this drug to Eli Lilly & Co. (NYSE:LLY) in a tacit declaration of no confidence a few years ago.”

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!