Eli Lilly Ends Covid-19 Trial In Hospitalized Patients On Disappointing Data

Eli Lilly & Co. announced on Monday that it will stop a US-based clinical trial for its COVID-19 antibody treatment after data found that it is “unlikely” to help hospitalized patients recover from the advanced stage of the disease.

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The move comes after the Phase 3 trial of the monoclonal antibody treatment was paused this month by the US Food and Drug Administration (FDA) over safety concerns. Lilly (LLY) said that based on an updated dataset from the trial on October 26, no additional COVID-19 patients in the hospitalized setting will receive the antibody treatment bamlanivimab. According to the updated dataset, differences in safety outcomes between the groups were not significant, the drugmaker added.

“While there was insufficient evidence that bamlanivimab improved clinical outcomes when added to other treatments in hospitalized patients with COVID-19, we remain confident based on data from Lilly’s BLAZE-1 study that bamlanivimab monotherapy may prevent progression of disease for those earlier in the course of COVID-19,” Lilly said in a statement.

The ACTIV-3 clinical trial was being run by the US National Institute of Allergy and Infectious Diseases (NIAID), which is part of the National Institutes of Health (NIH), and was the only study evaluating the efficacy of bamlanivimab in hospitalized COVID-19 patients. Meanwhile, Lilly said it will continue all other ongoing trials for its coronavirus antibody treatment, including ACTIV-2, the NIH-sponsored study in recently diagnosed mild to moderate COVID-19 patients.

Lilly’s Phase 2 trial in patients recently diagnosed with COVID-19 in the ambulatory setting, studying bamlanivimab as a monotherapy and in combination with etesevimab is also ongoing.

Earlier this month, Lilly announced that it had applied for emergency use authorization (EUA) for one of its COVID-19 antibody candidates, LY-CoV555, as a monotherapy for higher risk patients with mild-to-moderate symptoms. The company has also presented new interim trial data for the combination therapy of LY-CoV555 and another antibody, LY-CoV016.

Shares in LLY are up almost 8% year-to-date, but have dropped almost 4.3% over the past month following the Phase 3 trial pause. (See Eli Lilly’s stock analysis on TipRanks).

Ahead of LLY’s 3Q results today, Mizuho analyst Vamil Divan reiterated a Hold rating on the stock with a $164 price target (16% upside potential), noting that additional information related to Lilly’s work on COVID-19 therapeutics will likely garner investor interest, as will any potential comments on the Phase 3 data for tirzepatide expected by year-end and Phase 2 Alzheimer’s data expected in 2021.

“Lilly sales this quarter is a little more challenging than usual given the dynamics related to COVID-19 destocking as well as the impact of the donut hole,” Divan wrote in a note to investors. “Our sales estimates appear to be lower than consensus mainly for their diabetes business, including Humalog, Jardiance and Tradjenta.”

The analyst expects Lilly to report 3Q revenues of $5.862 billion vs. consensus of $5.884 billion and Non-GAAP EPS of $1.76 in line with the $1.76 consensus.

“We see Lilly as a best-in-class story but have struggled to see additional drivers of upside,” he summed up.

Overall, the stock scores a bullish Strong Buy Street consensus. That’s with a $176 average analyst price target, indicating 24% upside potential lies ahead.