Reports: Lilly may acquire other companies following Bydureon setback

NEW YORK Speculation has emerged that Eli Lilly may seek to acquire several other companies in light of its difficulties winning approval for a long-acting diabetes treatment, according to published reports.

Bloomberg reported industry analysts as saying that Lilly may try to acquire Amylin Pharmaceuticals, with which it developed the Type 2 diabetes treatment Bydureon (exenatide), a once-weekly formulation of the daily drug Byetta. Last week, the Food and Drug Administration declined to approve Bydureon; and while the agency’s decision isn’t the end of the drug, it does mean that Lilly and Amylin will have to wait until at least late next year before winning approval, thus giving ample time for Novo Nordisk to take some of Byetta’s market share with its own daily diabetes treatment, Victoza (liraglutide). Byetta and Victoza directly compete because they belong to the same drug class, known as GLP-1 analogues.

Like a lot of big drug companies, Lilly is at risk of huge profit losses due to many of its drugs losing patent protection and facing generic competition. But while other big companies facing similar risks responded last year with large-scale acquisitions to beef up their pipelines — notably Pfizer’s acquisition of Wyeth and Merck’s acquisition of Schering-Plough — Lilly instead pledged to increase investment in its own research and development division.

Now, Lilly may have to pursue the same tactic as Pfizer and Merck, and Bloomberg reported that the company may try to take control of Endo Pharmaceuticals or Cephalon.