Lilly, MacroGenics Say Diabetes Treatment Misses Goal in Late-Stage Study

Eli Lilly & Co. and MacroGenics Inc. said an experimental diabetes treatment failed to help patients in a late-stage study, the second setback for a Lilly diabetes drug candidate in two days.

An analysis by an independent panel of experts determined that the drug, teplizumab, was not effective in slowing the progress of Type 1 diabetes, the companies said in a statement. Lilly and MacroGenics will suspend the study, the third of three phases of clinical trials usually needed to gain U.S. regulatory approval, and two additional trials of the drug for Type 1 diabetes, Kelley Murphy, a Lilly spokeswoman, said today in a telephone interview.

Lilly, based in Indianapolis, licensed teplizumab from MacroGenics, a closely held company in Rockville, Maryland, that is also developing drugs to treat cancer and infectious diseases. Teplizumab was the most advanced drug in MacroGenics’s pipeline, the company said on its website. Lilly is seeking new treatments to replace revenue when older medicines including its top-seller, the antipsychotic Zyprexa, lose patent protection beginning next year.

“Lilly and MacroGenics will be considering all options for teplizumab in Type 1 diabetes,” Gwen Krivi, a vice president in Lilly’s diabetes group, said in the statement.

Patients with Type 1 diabetes don’t produce the insulin needed to regulate blood sugar. It usually is diagnosed in children and young adults and was formerly known as juvenile diabetes, according to the American Diabetes Association.

John Lechleiter, Lilly’s chief executive, in April 2008 cited teplizumab as one of three most promising experimental drugs in the company’s pipeline.

Lilly’s shares fell $1.44, or 3.9 percent, to $36.01 at 4 p.m. in New York Stock Exchange composite trading, the company’s biggest single-day decline in 10 months. Lilly and its partners, Amylin Pharmaceuticals Inc. and Alkermes Inc. announced yesterday that U.S. regulators had rejected a proposed once- weekly version of their diabetes drug Byetta.

To contact the reporter on this story: David Olmos in San Francisco at dolmos@bloomberg.net

To contact the editor responsible for this story: Reg Gale at Rgale5@bloomberg.net

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