Leerink Affirms Lilly (LLY) at 'Outperform' with MONARCH 2 Set to Continue

Leerink affirms Lilly (NYSE: LLY) with an Outperform rating and $105 price target after the company announced that following a pre-planned interim analysis for MONARCH 2, an independent Data Monitoring Committee (DMC) provided the recommendation to continue the study without modification as the interim efficacy criteria were not met.

Analyst Seamus Fernandez commented today, Importantly, in our follow-up conversation, LLY mgmt confirmed that they would not be filing abemaciclib monotherapy (based on the single-arm MONARCH-1 study) in 3Q this year. They will be in dialogue with the FDA as well as monitoring internal and external data before making a decision on filing. Key data to consider will be the interim analysis for the MONARCH-3 trial (abemaciclib + aromatase inhibitors in 1L HR+/HER2- mBC), expected before the end of 2016.

We recently increased our overall CDK4/6 market size forecast to $13B in 2025, following the impressive data from PFE's (MP) PALOMA-2 study presented at ASCO (LINK). But for LLY's abemaciclib, advancing competition and a less differentiated profile will make an increasing challenging environment when it launches. We are not changing our sales estimate for abemaciclib at this point, pending further evaluation of the space and data presentation from the MONALEESA-2 (NVS [MP]'s ribociclib + letrozole) study.

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