Eli Lilly and Co (NYSE:LLY) Jardiance Beats Johnson & Johnson (NYSE:JNJ) Invokana


The Food and Drug Administration has sent out a stern warning over the use of diabetes meds Invokana, Invokamet and Invokamet XR. The agency says that the drugs from Johnson & Johnson (NYSE:JNJ) have a higher risk of leg and foot amputations and has called on the company to place warning labels on them. The new unfolding will be a blow to JNJ but beneficial to Eli Lilly and Co (NYSE:LLY) Jardiance.

An influx of Invokana patients transitioning to Lilly’s meds

The FDA’s conclusion on the diabetes drug Invokana was pegged on two large clinical trials dubbed Canvas and Canvas-R. Each of them described the occurrence of leg and foot amputations, which was found to be two times more common in patients treated with Invokana compared to placebo.

This has triggered an increase of patients who are adopting the use of Jardiance. Invokana, which helps in cutting the threat of cardiovascular death in adults with Type 2 diabetes, was approved in December.

According to Leerink analyst Seamus Fernandez, Lilly is likely to reap big from the influx of patients. In a note to clients, Fernandez stated, “The increasingly differentiated labels and data to date suggest that Lilly’s Jardiance likely will be a near-term beneficiary of further and perhaps accelerated market share losses for Invokana.”

But Eli Lilly’s rheumatoid arthritis drug failed

Despite the approval of Eli Lilly’s diabetes meds, the FDA declined to endorse the company’s Olumiant. The treatment is primarily used for moderate-to-severe rheumatoid arthritis and was a collaboration between Lilly and Incyte Corporation. According to the agency, additional clinical data are needed in the identification of the correct doses.

This is the second time that the drug has failed to get approval, having had a three-month extension, which was issued in January. There was a lot of optimism in the industry that the drug would pass the bill. The two companies have differed with the Agency’s conclusions and it is likely that they will seek an appeal.

In the meantime, Eli Lilly’s was trading at $78.99 a fall of $1.31 or 1.63% while that JNJ closed at $127.77 witnessing an increase of $0.78 or 0.61%.

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