Eli Lilly Diabetes Drug Data Seen As 'Nothing Short Of Extraordinary'

NEW YORK (TheStreet) -- Shares of pharmaceutical giant Eli Lilly  (LLY) rallied 6.5% yesterday after the company reported data from a study of its type 2 diabetes drug, but analysts see significantly more room for the stock to run following the "extraordinary" trial results.

BACKGROUND: Yesterday, Eli Lilly and partner Boehringer Ingelheim reported that Jardiance, an oral medication that belongs to a class of drugs called sodium-glucose co-transporter-2, or SGLT2, inhibitors, "significantly reduced the risk" of the combined endpoint of cardiovascular death, non-fatal heart attack or non-fatal stroke by 14% when added to standard of care in patients with type 2 diabetes at high risk of CV events. There was a 38% reduction in CV death, with no significant difference in the risk of non-fatal heart attack or non-fatal stroke, the companies added. Other SGLT2 inhibitors include AstraZeneca's (AZN) Farxiga and Janssen Pharmaceuticals' (JNJ) Invokana. Januvia, which is marketed by Merck  (MRK) , is an oral anti-diabetic drug from another class, the dipeptidyl peptidase-4, or DPP-4, inhibitor class. Other DPP-4 inhibitors currently on the market include AstraZeneca and Bristol-Myers' (BMY) Onglyza and Novartis' (NVS) Galvus.

EXTRAORDINARY DATA: Piper Jaffray analyst Richard Purkiss views yesterday's cardiovascular outcomes data for Eli Lilly's Jardiance in type 2 diabetics as "nothing short of extraordinary." Highlights are a 32% reduction in all-cause mortality and a lower serious adverse event rate than placebo, Purkiss told investors in a research note. Since Jardiance is the first anti-diabetic drug to ever show a CV outcomes benefit in a single study, it will likely be used in front of other drug classes in the management of type 2 diabetes, Purkiss contends. He keeps an Overweight rating on Eli Lilly with a $120 price target.

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