Eli Lilly’s Acquisition Strategy, And Other News: The Good, Bad And Ugly Of Biopharma – Seeking Alpha

Posted: January 26, 2020 at 11:51 pm

Eli Lilly and Company (LLY) is looking forward to growing its portfolio through acquisitions and mergers. Company CFO John Smiley reported that the pharma giant is planning to clock $1 billion to $5 billion worth of deals for each quarter of 2020.

The announcement comes on the heels of its latest acquisition worth $1.1 billion. Under this deal, the company would be acquiring dermatology products maker Dermira. The companies plan to close the deal by the end of the quarter. Dermira currently has only one product in the market which is Qbrexza (glycopyrronium) cloth for treating excessive sweating in underarms or primary axillary hyperhidrosis. The treatment had closed $10.2 million in revenue during the last quarter. Dermira also has one lead drug candidate in Phase 3 stage which is aimed at treating atopic dermatitis.

Eli Lilly plans to focus on early stage pharma companies dealing in areas such as pain, immunology, neurology and oncology. While the company had been on an acquisition spree for quite some time, this year it is planning to take its growth strategy to a new level. The main reasons behind these acquisitions are to populate its product pipeline and grow its revenues. With more and more of its older products facing competition from generics, Eli Lilly is looking at other options to boost its position in the market.

In the past couple of years, the company has made considerable investment in the cancer segment including the $8 billion acquisition deal for Loxo Oncology. The deal led to the inclusion of Vitrakvi to Eli Lillys portfolio. The drug is designed to treat a wide range of cancers caused by a rare genetic mutation. While the market expected the company to continue with its oncology theme for acquisitions, the latest announcement shows that Eli Lilly is looking to widen its horizons and enter new markets.

Eli Lilly possesses adequate resources to fund its buying spree. During its most recent earnings announcement, the company provided better than expected guidance for 2020. It projected 2020 revenue to be in the range of $23.6 billion and $24.1 billion, surpassing consensus estimate of $23.5 billion. The company also expects its adjusted earnings to be in between $6.70 and $6.80 per share range.

Eli Lilly is mainly banking upon higher demand for its new products such as Taltz and Trulicity. The former is developed for treating psoriasis and other related autoimmune diseases while the latter is for treating diabetes. The company expects that these new drugs will be able to make up for the losses caused due to increased generic competition for other established products of Eli Lilly. In 2019, the companys flagship product Cialis lost its exclusivity, putting a dent in the companys top line.

Eli Lilly stock posted close to 20 percent gain in the past 12 months and the company is looking forward to a strong year ahead. With its strong drug pipeline, which Eli Lilly plans to grow both organically as well as through acquisitions, the company is in a position to retain its leadership stance in the market. In the coming year, Eli Lilly is going to have several important milestones coming up including the FDA decision for two new drug candidates including a diabetes treatment. Further, the company is also looking forward to market launches. Overall, the scenario looks rosy for the company.

Helius Medical Technologies (HSDT) reported that it has entered into collaboration with the University Health Network in Canada. The agreement deals with conducting a clinical experience program which will enable the Network and three independent neurorehabilitation clinics to appraise the Companys Portable Neuromodulation Stimulator (PoNS) device along with the physical therapy, on people suffering from chronic balance deficit caused by mild-to-moderate traumatic brain injury.

The collaboration will help the Network assess the device and decide the extent to which these may be incorporated into their clinical practices. The Portable Neuromodulation Stimulator (PoNS) is an authorized class II, non-implantable, medical device in Canada intended for use as a short-term treatment aimed at patients with chronic balance deficit. The device is currently under review for clearance by the AUS Therapeutic Goods Administration.

Helius stock has been thrashed over the course of the past one year. The new collaboration is expected to provide a positive fillip to the stock. The company mainly deals with developing neurotechnology products which are non-invasive in nature. With this new collaboration, the company may look forward to more robust top line growth with access to new markets.

Durect Corporation (DRRX) stock stumbled as the company provided an update about its Posimir treatment. The FDA advisory committee deliberating about the fate of this treatment ended its meeting with a split vote. Posimir is being developed as an extended release solution for treating post-surgical pain. While the treatment received positive response from six of the committee members, the other six members voted against it. The company CEO James Brown said that the company intends to keep working with the FDA for the review purpose.

Durect management remains optimistic about the outcome as the FDA is not obliged to follow the recommendation of the committee. The Anesthetic and Analgesic Drug Products Advisory Committee was convened to review the Class 2 New Drug Application (NDA) resubmission for the treatment. The company had received a CRL for the treatment in 2014. Posimir has been through 16 clinical trials so far. These trials involved over 1,400 subjects. Out of these patients, 850 were administered Posimir while others were kept in control groups.

Durects clinical development program is designed to assess the safety and efficacy of a single dose of POSIMIR for treating post-surgical pains for up to three days. In its two completed trials, the drug showed significant reduction in pain over the time period of 0 to 72 hours after the surgery.

Thanks for reading. At the Total Pharma Tracker, we do more than follow biotech news. Using our IOMachine, our team of analysts work to be ahead of the curve.

That means that when the catalyst comes that will make or break a stock, weve positioned ourselves for success. And we share that positioning and all the analysis behind it with our members.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

See original here:

Eli Lilly's Acquisition Strategy, And Other News: The Good, Bad And Ugly Of Biopharma - Seeking Alpha

Related Post