It looked like Eli Lilly (NYSE: LLY) would be able to make a fast buck when it bought Alnara Pharmaceuticals last year. The biotech already had a drug under review at the Food and Drug Administration, so the potential for a quick payback seemed likely.

Until yesterday.

An FDA advisory panel voted 7-4 to recommend that the agency not approve Lilly's recent addition, liprotamase, which is designed to aid in digestion of food for patients with a pancreas that doesn't work at full throttle, which includes many cystic fibrosis patients.

The experts on the panel are worried that liprotamase wasn't compared to other drugs that are available, making it hard to know exactly how well the drug works.

If it makes it to market, liprotamase will have plenty of competition from Abbott Labs' (NYSE: ABT) Creon, Johnson & Johnson's (NYSE: JNJ) Pancreaze, and Eurand's (Nasdaq: EURX) Zenpep. But those drugs are derived from pigs, which can theoretically cause problems. The bigger advantage is that Lilly believes liprotamase is more potent and therefore requires fewer pills.

The FDA has the final say, but it seems likely it'll come back to Lilly and ask for more studies. We'll have to wait and see whether the advantage of fewer pills will hold up once the drugs are tested head to head.

The likely delay is certainly bad news for investors, but there does seem to be a bright spot: Lilly hedged its bet when it purchased Alnara by only putting up $180 million initially for the company. The remaining $200 million is tied to regulatory and commercial milestones. Lilly didn't disclose how the milestones broke down, but presumably a big chunk of that $200 million was tied to approval of liprotamase. If Lilly was really smart, it set up the milestone payments so that they were reduced if there was a delay, essentially making Alnara's former shareholders indirectly pay for the new trial.

Of course, for a company with a patent cliff as steep as Lilly's, paying less for a delayed drug isn't going to cut down on the indigestion.

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Motley Fool Options has recommended a diagonal call position on Johnson & Johnson, which is a Motley Fool Income Investor selection. The Fool owns shares of Johnson & Johnson. Motley Fool Alpha owns shares of Abbott Laboratories and Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.