The delay in the FDA review of Lilly/Icos' Cialis creates an opening for Bayer to establish Nuviva as the primary challenger to Pfizer's Viagra in the oral erectile dysfunction class.

Lilly and Icos are moving back the projected launch date for Cialis (tadalafil) from the second-half of 2002 to sometime in 2003. On April 29, the companies received an FDA "approvable" letter with a request for more information. Bayer continues to expect approval for Nuviva (vardenafil) in the second half of this year.

Icos immediately discounted the impact of a third-in-class launch on Cialis. "I firmly believe in this business in the long run, science wins out and we have a lot of confidence in the profile of our product," Icos CEO Paul Clark said during an April 30 conference call.

"I might remind folks that there certainly are examples of products that are not first or second, but have very strong profiles; [Pfizer's] Lipitor comes to mind," Clark added.

In terms of changing marketing strategy for a third-in-class launch, "if I had to make a decision today, I don't think I would change very much," Clark said. "We think we have a very strong competitive profile. We think that will speak for itself."

Another competitor with a different mechanism of action, TAP's Uprima (apomorphine), is scheduled for an NDA refiling in the fourth quarter of this year (¹ Also see "TAP Uprima Erectile Dysfunction NDA Refiling Slated For 4Q, Abbott Says" - Pink Sheet, 15 April, 2002., p. 23). The NDA was withdrawn in June 2000 (² Also see "TAP Uprima 3 Mg Dose Studies To Be Completed This Summer; NDA Withdrawn" - Pink Sheet, 3 July, 2000., p. 23).

In the "approvable" letter for Cialis, FDA requested additional confirmatory clinical pharmacology studies.

FDA appears to be asking Lilly/Icos to provide an "extra margin of protection" for Cialis prior to approval due to the potential for recreational use of the erectile dysfunction drug.

"It's clear that as the FDA looks at this category, they're concerned with situations that include potential recreational use and even situations where the drug is abused in order to provide sort of an extra margin of protection," Lilly Exec VP-Pharmaceutical Products & Corporate Development John Lechleiter, PhD, told investors April 30. "It's clear to us...[that] they're looking this way at the entire class."

Bayer submitted the NDA for vardenafil in September 2001. The company says that it has not received any further requests from FDA for safety data to this point.

Cialis' long half-life, which has been touted by Lilly/Icos as one of the drug's main advantages permitting spontaneity, may be another safety concern.

In addition to the confirmatory studies requested by FDA, the companies said labeling and Lilly's GMP discussions are also issues.

FDA has two manufacturing inspections underway at Lilly. At one facility, the agency is inspecting Cialis and duloxetine bulk manufacturing processes, and parts of the atomoxetine process. Lilly's dry products facility where Cialis is one of several products manufactured is also being inspected.

Lilly's antipsychotic Zyprexa IM (olanzapine) and osteoporosis drug Forteo (teriparatide) are also held up at FDA due to the manufacturing review.

FDA cited 50 observations related to good manufacturing practices (GMPs) during pre-approval re-inspections for Forteo and Zyprexa IM at the Indianapolis parenteral facilities (³ Also see "Lilly GMP “Culture Change” Will Address Compliance Issues, Firm Tells FDA" - Pink Sheet, 4 February, 2002., p. 34).

The delay in approval for Cialis is one of the factors contributing to a downgrading of Lilly's earnings per share guidance for the year from $2.70-2.80 per share to $2.60-2.65 per share, excluding unusual items, Lilly CFO Charlie Golden told analysts.

Another factor affecting the drop in EPS is the delay in anticipated launch for the attention deficit hyperactivity disorder drug atomoxetine ( Strattera ), Golden said. Lilly had forecasted the launch sometime between late 2002 and early 2003. During the April 30 call, Lilly moved the launch back slightly to spring 2003.

The continued slow uptake of Lilly's sepsis agent Xigris (drotrecogin alfa)is the third factor contributing to the adjusted 2002 financial guidance, Holden said. Lilly's revised consensus estimate for total 2002 Xigris sales is $250 mil. which will take a significant ramp-up in sales from the first several months of this year (⁴ Also see "Lilly Foresees No Zyprexa Diabetes Warning In U.S.; Pfizer Sees Opening" - Pink Sheet, 22 April, 2002., p. 23).

Lilly is broadening the range of healthcare providers being detailed for Xigris. "We are in the process of reviewing all of our marketing programs at this stage," Lilly CEO Sidney Taurel said. "What we are looking at here is a lower ramp-up than what we expected, but our commitment to this drug is as strong as ever."

Lilly estimates 2003 EPS growth to be in the 13% to 19% range but notes that target is dependent on resolution of manufacturing issues and timely launches of Zyprexa IM, atomoxetine, Forteo and duloxetine for depression.

The launch of duloxetine for major depressive disorder is still on course for the end of 2002, the company said. Lilly also plans to file an NDA for duloxetine in stress urinary incontinence in late 2002.

"We're going to share results in the late-breaking news forum at the [American Urological Association] meeting in May for the first of three pivotal Phase III trials for duloxetine" for stress urinary incontinence, Lilly Director-Investor Relations Simon Harford said on the company's first quarter earnings call April 15.

Forteo remains "approvable" at FDA pending resolution of labeling discussions in addition to manufacturing issues.

Lilly is also "in the process of completing" a study examining the instance of osteosarcomas associated with Forteo use, Lechleiter told analysts. FDA asked the company to conduct the study following a July advisory committee review (⁵ Also see "Lilly Forteo Follow-Up Rat Osteosarcoma Study To Finish By End Of 2002" - Pink Sheet, 6 August, 2001., p. 12).

"FDA's been kept abreast of the timetable. We'll be sharing that information with FDA later in the year." Lilly continues "to have very productive discussions with FDA around the label and the use of the product in the target population," Lechleiter said.

Lilly has delayed filing its multitargeted antifolate agent Alimta (pemetrexed disodium) due to a decision to return to the original freeze-dried formulation, which was used in the majority of the clinical studies. "We had developed a liquid preparation to facilitate ease of use...and we had some stability problems with the liquid presentation," Lechleiter said.

To ensure "that there's not going to be any kind of formulation-related glitch here...and supply the necessary data to the FDA, validation information, etc., it's going to delay the timing, at least the chemistry part of that filing" to 2003. Lilly previously expected to submit the Alimta NDA in 2002.

Lilly Cialis Delay Clears Space For Bayer Nuviva: Extra FDA Caution Cited

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