Winners and Losers of Eli Lilly's CETP Drug Failure

By Brian

Eli Lilly (NYSE: LLY) announced today that it's stopping development of evacetrapib, a cholesteryl ester transfer protein (CETP) inhibitor, because an interim look at a phase 3 trial, dubbed Accelerate, showed the drug wasn't reducing cardiovascular events.

CETP protein structure by Emw via Wikimedia Commons.

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Evacetrapib joins Pfizer'storcetrapib and Roche's dalcetrapib in the CETP inhibitor graveyard. CETP is a protein responsible for changing HDL cholesterol (that's the good kind) into LDL cholesterol (that's the bad kind), and vice versa. Inhibiting CETP results in more HDL and less LDL, which sounds good on paper.

Unfortunately, torcetrapib had excessive deaths in its phase 3 program. Roche and Eli Lilly tried developed next-generation CETP that don't seem to have the safety issue, but neither was able to show that their drugs were able to improve clinical outcomes despite lowering LDL and increasing HDL.

The failure is obviously a very big deal for Eli Lilly based on the decline of its stock today. With the two previous CETP failures, it was a risky proposition, so investors shouldn't have penciled in large salesof evacetrapib when calculating their value ofEli Lilly, but clearly that wasn't the case, with shares down more than 8% today. Part of the decline probably has to do with investors waking up and realizing that pharma can be risky, too -- albeit not as much as biotech, which has been selling off for months.

Beyond Eli Lilly, there are few other companies that are indirectly affected by evacetrapib's failure.

Losers Merck is developing a CETP inhibitor, anacetrapib, that's in phase 3 development. Eli Lilly's failure clearly casts doubts on whether Merck's program will succeed where others have failed.

Anacetrapib increases HDL by approximately 140% compared to evacetrapib and dalcetrapib that only increased the good cholesterol by approximately 80% and 30%, respectively. Will that be enough to push Merck over the clinical efficacy hump? We'll know sometime in 2017, when the trial is scheduled to complete, or perhaps earlier if an interim look reveals that, like evacetrapib, the drug isn't working.

WinnersCholesterol-lowering drugs in a different class, called PCSK9 inhibitors, are clear winners here because they won't have to compete with CETP inhibitors -- assuming anacetrapib fails as well.

Two PCSK9 inhibitors -- Amgen's Repatha and Praluent, from Regeneron Pharmaceuticals and Sanofi-- were both approved recently. Being the smallest of the three, Regeneron Pharmaceuticals is likely to benefit most from the CETP failures.

Mixed bagWe should actually put Amgen in the mixed-bag group. While it'll clearly benefit from less competition for Repatha, the biotech announced last month that it was purchasing Netherlands-basedDezima Pharma. The main impetus for making the purchase was Dezima's lead drug TA-8995 which is a -- you guessed it -- CETP inhibitor.

Amgen is scheduled to pay $300 million for the company, "and up to$1.25 billionin additional payments if certain development and sales milestones are achieved." Amgen probably won't have to pay much of the latter if TA-8995 fails, but how much is it going to have to pay in clinical trial costs to figure that out?

Esperion Therapeutics is developing a drug in a different class, so like the PCSK9 inhibitors, CETP failures will result in less competition for ETC-1002. But unlike the PCSK9 inhibitors, ETC-1002 isn't approved yet. It's possible the clinical efficacy failure of evacetrapib despite good-looking cholesterol laboratory results will push the FDA to require Esperion Therapeutics to run a clinical outcomes trial before it will approve ETC-1002.

Amgen, Regeneron Pharmaceuticals, and Sanofi are also required to run clinical outcomes trials, but the FDA approved the PCSK9 drugs while the trials were under way. Esperion Therapeutics is hoping for the same treatment, but the news could push the agency toward requiring clinical efficacy before approval, which would delay an approval by a couple of years. ETC-1002 and CETP inhibitors have completely different mechanisms of action, so the FDA may not lump them together, but the worry is still there.

The article Winners and Losers of Eli Lilly's CETP Drug Failure originally appeared on

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