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July 7, 2010
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Eli Lilly and Company (LLY) recently announced that it intends to acquire privately held biotech company Alnara Pharmaceuticals Inc. Alnara specializes in the development of protein therapeutics for the treatment of metabolic diseases. The financial terms of the deal were not disclosed.
With this acquisition, Eli Lilly is looking to enter the enzyme replacement therapy market, which is still significantly unmet. Eli Lilly will gain access to Alnara’s lead candidate, liprotamase, which is currently under US Food and Drug Administration (FDA) review for the treatment of exocrine pancreatic insufficiency (EPI). Alnara is also developing a pediatric formulation of liprotamase.
In addition to being observed in chronic pancreatitis and pancreatectomy cases, exocrine pancreatic insufficiency is often observed in patients suffering from cystic fibrosis which is estimated to affect about 30,000 children and adults in the US and 100,000 people worldwide. With about 90% of these patients requiring pancreatic enzyme replacement therapy, liprotamase should see decent uptake once launched.
We note that several therapies for pancreatic enzyme replacement are already available including Abbott’s (ABT) Creon, Eurand Pharmaceuticals’ (EURX) Zenpep and Johnson & Johnson’s (JNJ) Pancreaze. However, all these treatments are porcine-based and liprotamase could score over them as it is non-porcine based. This could help reduce the risk to viral exposure.
Moreover, liprotamase would come with a convenient dosing regimen as a fewer number of pills would be required to be taken compared to currently approved treatments.
The Alnara deal is in line with Eli Lilly’s goal to strengthen its pipeline through acquisitions and in-licensing deals. We currently have a Neutral recommendation on Eli Lilly, which has a Zacks #3 Rank (Hold).
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