A Blockbuster in India
Jordo is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Good collaboration can bring about success in the pharmaceutical industry, and Eli Lilly (NYSE: LLY) is one company that demonstrates this idea. Eli Lilly and Boehringer Ingelheim have prepared the launch of their first diabetes drug in India, and it should bring good results.
The companies have banded together for the express purpose of becoming a powerful force in the treatment of diabetes, and the alliance will soon bring a product to the Indian market for the first time. The drug is called Linagliptin, and it is a significant drug for diabetes. It does not come with the side-effects that one would normally associate with diabetes medication, such as weight gain and low-sugar attacks. In addition, this drug is easy on the kidneys. The drug is excreted in ways that do not require the assistance of the kidneys, which creates a more comfortable experience for the patients that take the drug. The drug is aimed at adults with type 2 diabetes, and it should continue bringing success to the companies.
Linagliptin was launched a year ago in the United States with great results. As far as the Indian market is concerned, however, the drug may be a little too expensive. Eli Lilly needs to make sure that it is not pricing itself out of the market with this new introduction. The drug may need to be more "price competitive" if it is to achieve success. One has to be a little critical of the way this drug will be marketed in India.
Regardless, this launch of Linagliptin is certainly a significant milestone for the alliance, helping it make progress towards becoming a major force in the treatment of diabetes. A huge portion of the Indian population is in need of diabetes treatments. A large portion of this group does not receive adequate attention, and their needs go unmet. The alliance will continue to explore options and introduce new innovations in the country to address these needs. With these things in mind, the price of the drug may only be a minor issue, and the current launch should still be a success.
The two companies also plan to launch three more drugs in India under the alliance. They will eventually offer oral and injectable treatments for diabetes in the country. These drugs will be priced at a lower rate than they are in the West, which is only fair when you consider the economy of India. This will help the company's future efforts bring great success as well.
I believe that the alliance between the two companies will help them grow, as they can combine their existing diabetic medications and work together on inventing new ones that will revolutionize the future of medicine. In addition, India is a great country for pharmaceutical companies to address, as a number of illnesses are becoming more prevalent. Furthermore, there are not many drugs that are currently meeting the needs of the residents in India. In short, the country represents a great opportunity for drug makers.
Some companies are finding success in other ways. Merck (NYSE: MRK) recently reported some very impressive results about an insomnia drug that it is currently testing. It appears that the drug is actually going to work. Late-stage clinical trials have shown that the drug, suvorexant, is effective in helping patients with insomnia to fall asleep. In addition, once they have fallen asleep, the drug helps them actually stay asleep, which is a big problem with most people with insomnia. This makes it one of the most eagerly-awaited drugs at the moment, and it will help establish Merck as a leader in the industry. I expect Merck stock to be on the rise as a result.
Another competitor may not be doing so well, as the state of Missouri recently announced that Abbott Laboratories (NYSE: ABT) will pay it a sum of $15 million. This sum is part of a settlement relating to the drug company's alleged illegal practice when marketing the drug Depakote in the state. Depakote is an anticonvulsant medication, but it would seem that the company engaged in off-label marketing practices, saying the drug could be used for unapproved purposes. No formal lawsuit has been filed, but the company has chosen to pay the settlement in any case. This is not the first state to receive a settlement of this kind from Abbott. As a result of its continued difficulties with this situation, I think that Abbott stock will be struggling for some time to come.
In contrast, GlaxoSmithKline (NYSE: GSK) has had a stroke of luck, as the FDA recently approved its new drug MenHibrix. The drug can be used to "prevent an invasive disease caused by Neisseria meningitides serogroups C and Y and Haemophilus influenza type b." It is essentially a vaccination that can be given to children who are between the ages of 6 weeks and 18 months to prevent this disease. This is a significant breakthrough for the company, as this is the first combination vaccine to prevent meningococcal serogroups. GlaxoSmithKline stock, therefore, should benefit from this in the future.
CVS Caremark (CVS) and Rite Aid (RAD) recently filed an anti-trust lawsuit against Pfizer (PFE) and Teva Pharmaceuticals (TEVA). They have accused the companies of keeping cheaper generic drugs hidden from the general public in order to prevent competition for their popular anti-depressant drug, Effexor XR. Pfizer and Teva have been blocking attempts to bring generics into the market since 2008, the year that Pfizer lost its marketing rights to the compound. These kinds of allegations have been surrounding the companies for a while now, so Pfizer and Teva stock will probably be struggling in the near future.
The competition is fairly mixed in terms of success, but Eli Lilly appears to be a solid investment. Eli Lilly's partnership with Boehringer Ingelheim seems to be a wise one, as it will allow the two companies to address one of the crucial areas of medicine in this day and age - the treatment of diabetes. Any pharmaceutical company that can make a significant breakthrough in this area will be highly successful in the future and will be marked out as a leader in the industry. For the sake of the stockholders, I hope this is the direction that Eli Lilly is heading in. For the moment, things do seem good for the company, and I expect the stock to do well.
jordobivona has no positions in the stocks mentioned above. The Motley Fool owns shares of Abbott Laboratories and GlaxoSmithKline. Motley Fool newsletter services recommend GlaxoSmithKline. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.