Enthusiastic doctors could help Lilly cash in on Jardiance CV data

Payers may be playing it cool on Jardiance's new cardiovascular edge in the diabetes market, but doctors aren't--and neither are investors. Credit Suisse analyst Vamil Divan tapped physician sentiment in a proprietary survey and concluded that physicians will boost their Jardiance scripts quickly.

Last month, the Eli Lilly ($LLY) and Boehringer Ingelheim drug made a breakthrough that other diabetes meds have so far failed to achieve: It helped reduce the overall risk of heart attacks, strokes and cardiovascular death in an outcomes trial. The EMPA-REG OUTCOME study was hailed as a harbinger of success not only for Jardiance, but for its fellow drugs in the SGLT2 class.

Of course, trial data can only spur drug sales if doctors know about it, and according to Credit Suisse's research, they do. Most physicians already know about the EMPA-REG data, Divan reported in an investor note Friday.

"Our survey showed most physicians (especially endocrinologists) are already well aware of the mortality benefit demonstrated by Jardiance," Divan wrote in his research note. That awareness should translate into an uptick in scripts, and soon, he predicted--meaning that sales are likely to get an EMPA-REG boost sooner than expected.

An even bigger payoff is likely if and when the FDA reviews the trial data and updates Jardiance's official label accordingly. "[F]urther upside [is] likely in 2017 and beyond once the data from the study are included in the Jardiance package insert," Divan added.

Payers aren't eager to jump on the Jardiance bandwagon, however. Last month, Leerink Partners analyst Seamus Fernandez reported that insurers are waiting on a full release of the EMPA-REG data, slated for an upcoming meeting in Europe. They're also holding out for changed treatment guidelines from the American Diabetes Association and other advisory groups. Jardiance and its fellow SGLT2 drugs are, after all, more expensive than older treatments.

But if doctors are enthusiastic about EMPA-REG already, then the ADA might be willing to move quickly, too. Either way, analysts see the outcomes numbers giving Jardiance a boost of $2 billion or more on peak sales. Investors appeared ready to put their faith in a near-term payoff for Jardiance; Lilly's shares jumped on the Credit Suisse upgrade. Divan hiked his price target on the stock to $105 from $89.

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