FDA Panel's Rejection of Xigris Comes as a Painful Shock to Lilly

Eli Lilly's (LLY Quote) experimental sepsis drug, Xigris, was dealt a blow Tuesday after an advisory panel to the Food and Drug Administration voted not to recommend the drug's approval.

The problem: Evidence was presented at the panel meeting suggesting that Xigris was not as effective or safe as previously thought. Panel members, clearly concerned about these findings, voted to recommend against approval and asked Lilly to conduct additional clinical studies.

The Xigris setback will hurt Lilly, which has been trying to restart strong earnings growth after the decimation of its Prozac franchise. Xigris is one of five key products coming to market this year and next that the drugmaker is counting on to contribute to earnings growth in the high-teens range beginning in 2003. Lilly's loss of Prozac sales due to generic competition has pushed 2001 and 2002 earnings growth down into the single digits. ...