The mothballing of Eli Lilly's (NYSE:LLY) once-promising next-generation cholesterol drug, evacetrapib, eliminates a potential competitor to Regeneron (NASDAQ:REGN) and Amgen's (NASDAQ:AMGN) recently launched cholesterol busters while also reducing pressure on Esperion Therapeutics (NASDAQ:ESPR) to get its promising new anti-cholesterol drug to market sooner. Because Eli Lilly's decision may have significantly shifted how the cholesterol treatment market may look in the coming years, let's take a closer look.
Studies have shown that using statins to lower bad cholesterol levels leads to fewer life-threatening cardiac events and, as a result, statins, which lower cholesterol production in the liver, are being used to treat tens of millions of patients every year.
However, despite the effectiveness of statins, over 600,000 Americans are still dying every year from heart disease and millions of people worldwide still have bad cholesterol levels that are too high.
For that reason, drugmakers have spent billions of dollars studying drugs that could be used alongside statins to reduce bad cholesterol levels. Some of the most promising drugs resulting from that effort have been medicines that interrupt the activity of a key cholesterol esterase transfer protein (CETP) that transmits good cholesterol to bad cholesterol.
Because interrupting CETP activity can increase good cholesterol levels and lower bad cholesterol levels and early-stage trial results for CETP drugs, such as Eli Lilly's evacetrapib, were promising, many peoplle believed that CETP inhibitors could become an important weapon in the battle against heart disease.
Unfortunately, evacetrapib's failure throws cold water on that optimism because it marks yet another in a string of high-profile CETP drug disappointments.
In 2006, after plowing $800 million into the development of a CETP inhibitor that could solidify market share when its top-selling Lipitor lost patent protection in 2011, Pfizer was forced to shelve the drug when late-stage studies found that it actually increased, rather than reduced, the risk of death, heart attack, or stroke.
In 2012, Roche discarded its own CETP inhibitor program after independent monitors found that its drug simply didn't work well enough to warrant additional research.
One company's loss is another's gain
Despite Pfizer and Roche's decision to abandon their programs, Eli Lilly advanced evacetrapib into a massive 12,000 patient phase 3 study in late 2012, leading some to think that the company had built a better mousetrap. That hope, however, began fading earlier this year when Eli Lilly reported it was extending its evacetrapib's trial to see if efficacy improved with additional time. Last Monday, investors learned that the additional time wasn't enough to rescue evacetrapib, leading to Eli Lilly's decision to discontinue its program.
Eli Lilly's decision is a major coup for competitors that embraced non-CETP approaches, including Regeneron and Amgen.
Regeneron won FDA approval of Praluent in July and Amgen won FDA approval Repatha in August and both drugs will be used -- at least at first -- alongside statins in patients with stubbornly high bad cholesterol levels. If evacetrapib had aced, rather than failed, its phase 3 trial and it had made its way through regulators, then it would have competed against Praluent and Repatha for market share in those patients.
Evacetrapib's failure also casts doubt on other potential competitors to Regeneron and Amgen, including Merck's anacetrapib, a CETP inhibitor that's being evaluated in a 30,000 patient study that began in 2011 and that is expected to wrap up in 2017. Since three CETP inhibitors have now failed in late stage studies, it would seem that the odds are stacked up pretty high against Merck's program succeeding.
Eli Lilly's news may also be a victory for Esperion Therapeutics, a small-cap company researching ETC-1002, a cholesterol-lowering drug with a different mechanism of action than CETP inhibitors. Lately, Esperion Therapeutics shares have been crushed over fear that ETC-1002 would reach the market too late to carve out a foothold. Now that CETP inhibitors have been dealt another blow, those worries may lessen.
There's no question that heart disease patients need new treatment options and it's a shame that so much money and time has been invested in CETP inhibitors that could have been focused on other areas of research, but trial and error is nothing new in drug development and just because evacetrapib came out on the losing end of its study doesn't necessarily mean that Eli Lilly shares should be sold.
Regardless, following the abandonment of evacetrapib, it's Regeneron and Amgen, not Eli Lilly, that investors who remain interested in cholesterol-lowering therapies ought to focus on from here. Because both of those companies already have cholesterol-lowering drugs on the market, they're less risky of a bet than Esperion Therapeutics.
Todd Campbell owns shares of Esperion Therapeutics Inc. He owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.