Lly

Source: Eli Lilly

Results from a large cardiovascular study show that diabetics using Eli Lilly's (NYSE:LLY) Jardiance had fewer heart attacks and strokes than they might have suffered otherwise. The findings, which were also reported by Jardiance co-developer Boehringer Ingelheim, could shift how doctors treat patients and lead to significant sales growth for Eli Lilly.

A new class of diabetes medicine
Eli Lilly's once-daily Jardiance is an SGLT2-inhibiting pill that lowers blood glucose levels by blocking glucose reabsorption in the kidney.

Since 2013, three SGLT2 inhibitors have won FDA approval, and each is vying for a share of the $63 billion spent on diabetes drugs in America annually.

The first to win the FDA's blessing was Johnson & Johnson's Invokana, which got the regulatory nod in March 2013. AstraZeneca won approval for its SGLT2 drug, Farxiga, in January 2014, and Eli Lilly and Boehringer got the FDA's green light for Jardiance last August.

Even though Jardiance is the third of these drugs to make it to market, its positive cardiovascular study results could prove to be a key differentiator that turns it into the best-in-class option.

If so, then Jardiance has billion-dollar blockbuster potential, because sales of Invokana are already running at a $1.2 billion annualized pace  and Farxiga is already selling at a $500 million annual clip.

Additionally, Jardiance's cardiovascular benefit could lead to its displacing Merck's multibillion-dollar blockbuster Januvia as the top therapy prescribed after first-line metformin therapy fails to control blood sugar on its own.

If so, then Jardiance could become one of Eli Lilly's best-selling drugs, because Januvia hauled in $6 billion in sales for Merck in 2014.

Lilly

Source: Eli Lilly.

A big and growing need
Januvia's potential for widespread use stems from a significant unmet need for approaches that reduce heart attack and stroke in diabetes patients.

According to the American Diabetes Association, hospitalization rates for heart attack and stroke are 1.8 times and 1.5 times higher among adult diabetics than non-diabetic adults, respectively.

As a result, heart disease accounts for roughly half of all diabetes-related deaths in the U.S. every year, as well as a big chunk of the more than $176 billion spent on direct medical care for diabetics annually.

Since there are an estimated 1.7 million new cases of diabetes diagnosed in America each year, and since the International Diabetes Federation estimates that the global population of diabetics will surge by 205 million people by 2035, there's a massive need for treatment innovation that reduces the likelihood of heart disease.

More insight coming
Eli Lilly and Boehringer plan to release detailed results from their Jardiance cardiovascular study at a key industry conference to be held on Sept. 17, and you can bet that people will be watching closely to see just how big the cardiovascular benefit appears to be. If the data from this three-year, 7,000-patient trial is compelling, then Jardiance prescription volume could boost Eli Lilly's sales and profit next year and lead investors to bid up its share price.

Todd Campbell has no position in any stocks mentioned. Todd owns the equity research firm E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool recommends 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. The Motley Fool has a disclosure policy.