Eli Lilly & Co. (LLY): If You’re Going to Fail, Fail Quickly

Lilly calls active as shares soar; Put spreads constructed on Verizon, AT&TIn goes another drug into the Eli Lilly & Co. (NYSE:LLY) trash can. The pharma is dropping development of tabalumab for rheumatoid arthritis.

It’s not particularly surprising given that the drug failed a phase 3 trial in December, but it’s still disappointing for a company that could really use a positive result. Tabalumab joins in the trash can Alimta for lung cancer, pomaglumetad methionil for schizophrenia, and Forteo for back pain, which all recently failed clinical trials.

The trial results released in December showed that tabalumab failed to help patients who didn’t respond to methotrexate, a drug typically used early in disease progression. Based on that result, Eli Lilly decided to take an early look at its other study in patients who failed to respond to one or more tumor necrosis factor inhibitors — AbbVie Inc (NYSE:ABBV)‘s Humira, Johnson & Johnson (NYSE:JNJ) and Merck & Co., Inc. (NYSE:MRK)‘s Remicade, or Pfizer Inc. (NYSE:PFE) and Amgen, Inc. (NASDAQ:AMGN)‘s Enbrel — that are typically used later in the progression of rheumatoid arthritis. The interim peek at the data showed that it was futile to continue, so Lilly has decided to drop development of tabalumab in rheumatoid arthritis.

While Humira, Remicade, and Enbrel are safe from future competition from tabalumab, GlaxoSmithKline plc (ADR) (NYSE:GSK) still needs to watch its back. Eli Lilly is continuing development of tabalumab as a treatment for lupus. The drug attacks the same target — B cell activating factor, or BAFF — as Glaxo’s Benlysta, so the chance of success is higher for lupus.

Glaxo and its acquired partner Human Genome Sciences tested Benlysta on rheumatoid arthritis where it was shown to be ineffective, so it shouldn’t come as much of a surprise that tabalumab was ineffective as well.

I’m not sure exactly what led Lilly to believe it could succeed where Benlysta had failed, perhaps it felt tabalumab was a better inhibitor and could therefore succeed. Hindsight is 20/20, but it seems likely that BAFF isn’t a good target for rheumatoid arthritis. The only good decision we can say Lilly made in the development of tabalumab for rheumatoid arthritis is that it ended development early, saving money by not letting the trials go to completion before realizing that it was a dead end.

The article If You’re Going to Fail, Fail Quickly originally appeared on Fool.com and is written by Brian Orelli.

Fool contributor Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!