The NHS is a national treasure. We must continue to guard it

The biggest study into quality and safety in the NHS found spots of inspirational and compassionate care in every organisation. Photograph: Christopher Thomond

While there has been progress in the NHS on standards of care, it takes only one high-profile case of inadequate services to unsettle levels of public confidence and add to vague public perceptions that NHS care is disintegrating. The reality is far from this.

In the biggest ever such research programme, funded by the Department of Health policy research programme and published in the British Medical Journal Quality and Safety, we used observations, interviews, archival data, surveys and national data sets to study acute, mental health, ambulance and primary care across the whole of England. The findings have clear implications for the NHS and have already informed the Berwick and Keogh reviews.

We saw bright spots of inspirational and compassionate care in every organisation. And there were dark spots, too. We concluded that the challenge is to raise the overall level of care while reducing avoidable variability. Our research indicated how this can be achieved.

For example, echoing Francis, we concluded that clear leadership at a national level is needed to ensure an integrated approach to developing high quality cultures. With regulatory agencies pursuing different but overlapping functions, multiple and sometimes contradictory expectations, standards and targets, there is understandable confusion and loss of focus in NHS trusts. Regulators often adopt a deficit model, seeking poor performance while failing to highlight and celebrate outstanding performance and encouraging diffusion of good practice. This creates avoidance and anxiety that reduces innovation and encourages box ticking.

NHS England, the Care Quality Commission, patient organisations, politicians, Monitor, clinical commissioning groups and others with a powerful say in the NHS and social care must integrate, align and work effectively as partners to provide clear direction focused primarily on the delivery of high quality and compassionate care. And such organisations should reflect on their own cultures and the extent to which they encourage compassion and patient focus.

Partly because of this, the priorities at trust board level have often emphasised productivity, targets and efficiencies to the detriment of a focus on quality and safety. While productivity is vital, boards and senior teams need to retain a relentless focus on quality of care, safety, compassion and the patient experience in order to maintain the right balance in their priorities.

Boards must clarify their own six or seven objectives that are clear, challenging and measurable, and include care quality as the top priority. This goal clarity must be replicated at every level of the organisation – in directorates, teams and for individual frontline staff.

The NHS needs to get better at listening to the experiences of patients. Not box-ticking approaches that prioritise bureaucratic compliance with external requirements, and that only pick up comforting messages. Effective boards and trusts actively seek out and respond to problems by gathering rich, in-depth views from both patients and staff. They use the data intelligently and feed the knowledge back into the system and to frontline staff.

Every day the vast majority of NHS staff strive to deliver the highest quality of care. If we want them to treat patients with compassion, respect, dignity and professionalism, we must treat staff with compassion, respect, dignity and professionalism. In the best NHS organisations, we saw that staff were valued, supported and, above all, listened to. And they worked in effective teams with a high level of positivity and engagement to deliver truly compassionate care.

The best organisations have cultures of positivity, self-belief and compassion rather than fear, anxiety, hierarchy and defensiveness. Everyone is responsible for creating such cultures beginning with politicians, regulators and boards but also including staff, patients, media and the public. The NHS is a national treasure. We must continue to guard it rather than undermine it.

Prof Michael West is professor of organisational psychology at Lancaster University Management School.

This article is published by Guardian Professional. Join the Healthcare Professionals Network to receive regular emails and exclusive offers.

View the original article here

Expectations For Eli Lilly's Lung Cancer Drug Rise, But Revenue Concerns Continue

Eli Lilly & Co. (LLY): Expectations For Eli Lilly's Lung Cancer Drug Rise, But Revenue Concerns Continue - Seeking Alpha (function(_,e,rr,s){_errs=[s];var c=_.onerror;_.onerror=function(){var a=arguments;_errs.push(a); c&&c.apply(this,a)};var b=function(){var c=e.createElement(rr),b=e.getElementsByTagName(rr)[0]; c.src="//beacon.errorception.com/"+s+".js";c.async=!0;b.parentNode.insertBefore(c,b)}; _.addEventListener?_.addEventListener("load",b,!1):_.attachEvent("onload",b)}) (window,document,"script","4ffae9d6f05d1da630000008"); if (SA.Data && SA.Data.Cache) { var adata = SA.Data.Cache.get('campaign_content'); }.market_currents_list li .ticker_date_left .mc_list_tickers a{font-weight: normal} var ms_slug = ''; var article_dashboards = '@investing-ideas@sectors@'; var article_sectors_themes = '@long-ideas@us@drug-manufacturers-major@healthcare@article@'; var ratings_hash={}; var ARTICLE_ID = 1667152; var ARTICLE_TYPE = "standard"; var ARTICLE_LOCK = ""; var author_slug = "a-john-hodge"; var pticker_for_ads = "lly"; var time_left; var lock_comments = false; var machine_cookie = readCookie('machine_cookie'); var middle_version = ABTest.identity%10; try { window.sessionStorage.setItem("/article/"+ARTICLE_ID, '1'); } catch (error) {}var mone_article_tags = "{bmy,mrk,lly};;;{healthcare};;;{long-ideas,us,drug-manufacturers-major,investing-ideas};;;{a-john-hodge}"var ord = Math.floor(Math.random()*1000000000);Seeking Alpha Seeking Alpha Portfolio App for iPad Finance (1) var ipadData; SeekingAlpha.Initializer.AddAfterLoad(function(){ if (SA.Utils.Env.isIPad && !/3/.test(SA.Data.Cookies.get("user_devices"))){ Mone.event("ipad_promotion_top","top_ipad_banner_large","ipad_promotion_displayed"); ipadData = new SA.Data.iPad(); ipadData.instanceName = "ipadData"; var responseHandler = new Object(); responseHandler.handleResponse = function(data){ if (!data.averageUserRating) return; var stars = data.averageUserRating Home | Portfolio | Market Currents | Investing Ideas | Dividends & Income | ETFs | Macro View | ALERTS | PRO   This article was sent to 7,235 people who get email alerts on  . Which cover: new articles | breaking news | earnings results | dividend announcements Get email alerts on   » This article was sent to 337,618 people who get the Investing Ideas newsletter. Get the Investing Ideas newsletter » Expectations For Eli Lilly's Lung Cancer Drug Rise, But Revenue Concerns Continue Aug 30 2013, 15:47 by: A John Hodge  |  about: LLY, includes: BMY, MRK BOOKMARKED / READ LATER Bookmarked

Added to your bookmarks on the Seeking Alpha homepage

Remove Bookmark new SA.Pages.Article.bookmark("_top");

Eli Lilly Co. (LLY), in desperate need of a blockbuster new drug, may have struck gold when its lung cancer drug, necitumumab (IMC-11F8), was shown to extend patient survival in a phase 3 study. Necitumumab has met its primary endpoint in improving overall survival in patients who received the drug in combination with gemcitabine and cisplatin as a first-line therapy for metastatic squamous non-small cell lung cancer (NSCLC) when compared with chemotherapy alone. Necitumumab is a fully human IgG1 monoclonal antibody designed to block the ligand binding site of the human epidermal growth factor receptor (EGFR), which is a target in several anti-cancer treatments because it sparks cancer progression, both by promoting angiogenesis, or the formation of new blood vessels for tumors, and by inhibiting apoptosis, or cell death.

Necitumumab: From The Ash Heap To Blockbuster Drug?

Lilly expects to submit necitumumab for approval to the Food and Drug Administration (FDA) by the end of the year and, if approved, it could be a great revenue source for the company. Globally, the non-small-cell lung cancer (NSCLC) drug market is expected to reach $6.9 billion in 2019 and climb to $7.9 billion in 2022. There are over 1.2 million new cases of lung cancer diagnosed every year and over 1 million lung cancer patients will die each year, and non-small cell lung cancer (NSCLC) accounts for approximately 80% of all lung cancers. The positive results from the drug came as a surprise according to Mark Schoenebaum, analyst with ISI Group LLC, since not so long ago analysts had given up on necitumumab, with "basically zero" expectations as the drug failed in a prior non-squamous lung cancer trial. Bristol Myers Squibb (BMY), Lilly's partner in the drug, even gave it up as the company terminated the collaboration in late 2012. Mr. Schoenebaum added however, "We really need to see the full data to understand risk/benefit."

While necitumumab could be a potent boost to Lilly's product portfolio, the drug could also bring a much-needed new therapy for NSCLC, a cancer that has been proven difficult to treat with the current drugs on the market, such as Genentech's Avastin, which directly target tumors, as opposed to more broadly active chemotherapy drugs. Richard Gaynor, vice president of product development and medical affairs for Lilly Oncology, said in a prepared statement, "If approved, necitumumab could be the first biologic therapy indicated to treat patients with squamous lung cancer." And it is quite conceivable that the drug will dominate the NSCLC market with sales expected to reach $1.75 billion by 2022.

But necitumumab is not without some possible stiff competition, as Merck (MRK) plans to initiate late-stage clinical trials of lambrolizumab in the third quarter of 2013 for both non-small cell lung cancer and advanced melanoma. Lambrolizumab, which received "breakthrough status" in late April by the FDA, is an investigational antibody therapy designed to disrupt the action of the immune checkpoint protein PD-1 and therefore inhibit the ability of some cancers to evade the body's immune system.

Generics Continue To Chip Away At Revenue

Eli Lilly will be in need of new successful drugs to market, as sales of its $4.99 billion blockbuster treatment to combat depression, Cymbalta, are expected to plummet when the company loses U.S. patent protection in December. Cymbalta accounted for 22% of the $22 billion in global product sales in 2012, and $1.5 billion in second quarter of 2013. When a blockbuster drug falls off patent it can be devastating to revenue, as witnessed with Zyprexa, Lilly's once best-selling schizophrenia treatment, which had $2.17 billion in domestic sales the year before its patent expired. However, after the drug came off patent the company sold a mere $360 million in the U.S. as 63% of its sales were gobbled up by generic competition. And Lilly will experience more revenue declines as some of the company's other drugs fall off patent, like its $2.4 billion mealtime insulin, Humalog, which expires in June 2014. And the company will also lose its $1 billion osteoporosis medication, Evista, which falls off patent in March of 2014.

Solid Pipeline May Bring Solid Revenues Down The Line

The future is not glum for Lilly, as the company has spent heavily on R&D over the past few years, with $5.28 billion on R&D in 2012, and has no less than 60 potential new drugs in testing, including three in regulatory review and ten in phase 3 trials. For example Lilly submitted empagliflozin for a new drug application (NDA) for the treatment of type 2 diabetes in adults. Empagliflozin is one of a new class of glucose-lowering drugs which work by increasing urinary glucose excretion with a consequent lowering of plasma glucose levels. The company expects to receive a decision by the end of the second quarter 2014.

Lilly's advanced gastric cancer drug, ramucirumab, showed promising results from its phase 3 trials as the drug showed the median overall survival was better in 238 patients who received ramucirumab than in the 117 patients who received placebo. Earlier this year, the company initiated a fast track review to the FDA. Lilly also submitted the drug for approval for breast cancer patients, which could be where the real revenue success for the drug would be found. According to a recent CitiGroup report, peak sales potential could exceed $3 billion.

Cost Cutting: A Leaner Lilly In The Works

Ely Lilly's management team feels confident that over the next few years it will be able to mitigate the negative revenue impact of its drugs' patent expirations with successful launches of its late stage portfolio. The company is also mitigating its lost revenue with a series of cost cuts by slashing jobs and raising prices on Cymbalta before the patent expires. And these cuts have helped as Lilly's second-quarter earnings are up with reported earnings of $1.21 billion while worldwide revenues rose 6% to $5.93 billion, beating Wall Street expectations of $5.82 billion. Lilly also raised its EPS guidance for the year, to earn between $4.28 and $4.38 per share for the year on revenues between $22.6 billion and $23.4 billion.

The cost cutting will continue according to Lilly's Senior Director of Global Corporate Communications Ed Sagebiel, "We continue to face the most significant challenges in our history." The company will suspend base pay increases for most of its employees next year till 2015. Plus the company will be reducing bonuses by 25% for 2014, and it won't be paid out till 2015. These cuts are expected to shave $400 million through 2016. In May the company announced that roughly 1,000 sales staffers would be laid off, which amounted to 40% of the U.S. salesforce.

Ely Lilly is a $50.09 billion market cap company. Year-over-year the stock is up just under 20%, however the stock's growth has slowed from its late April high of $58.40. The company still has a solid dividend with a yield of 3.74, and carries one of the lower P/E ratios of the major drug companies, at 11.67. And the company holds more than $4.6 billion in short-term liquidity.

Conclusion

Big Pharma is experiencing a glut of generics eating away at what were once their revenue cash cows. However there seems to be new cash cows working their way down the pipelines. Lilly too has been hit hard and will continue to be hit hard by the generics, though the company has done some much needed "belt tightening" to get it through the tough times. And CEO John Lechleiter is quite confident that these measures will get them through, as he commented in a prepared statement: "Continued operating and financial discipline, along with a maturing pipeline of potential new medicines, gives me great confidence in the company's ability to meet the challenges we face from upcoming patent expirations and to resume growth after 2014."

While Lilly may experience a rocky road for the next few quarters, for an excellent dividend stock and a patient investor, Eli Lilly, with its cost cutting measures and perhaps a few blockbuster drugs in the pipeline, should be a good long-term stock to have in one's portfolio.

Source: Expectations For Eli Lilly's Lung Cancer Drug Rise, But Revenue Concerns Continue

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. (More...)

SA.Pages.Article.handleDisclosures(); This article was sent to 7,235 people who get email alerts on  . Get email alerts on   » This article was sent to 337,618 people who get the Investing Ideas newsletter. Get the Investing Ideas newsletter » Comments () This article has   comments. To read them or add your own, click here. The #1 Portfolio App is Now on iPad! Get instant notifications & never miss a critical update on your stocks! Which Seeking Alpha App is best for you? Seeking Alpha Portfolio Tech Investor ETF investor Energy Investor Email me a link to open from my phone: Continue 7,235  people received this article by email alert
Add your email to get alerts on   too: Get email alerts on   » This article was sent to 337,618 people who get the Investing Ideas newsletter. Get the Investing Ideas newsletter » Tagged: Investing Ideas, Long Ideas, Healthcare, Drug Manufacturers - Major Share this article with a colleague Tweet SeekingAlpha.Initializer.AddAfterLoad(function(){ new Ajax.Updater({success: 'widget_email_count'}, '/form/ajax_get_email_count', { method: 'get', parameters: { item_name: 'Article', article_id: '1667152' } }); }); BOOKMARKED / READ LATER Bookmarked

Added to your bookmarks on the Seeking Alpha homepage

Remove Bookmark new SA.Pages.Article.bookmark("_bottom"); var author_info_popup_timeout; About the author: A John Hodge John Hodge is an active trader who follows the technology/biotech sector specifically. I have been successfully trading stocks for the last 16 years and still thank those that pointed me in the direction of Qualcomm and Amgen many years ago. I believe research and timing is the key to long term... More A John Hodge Articles (40) Instablog (1) Comments (22) if (/stats viewer/.test(readCookie("user_perm"))) document.write("Earnings"); Profile 221 Followers 46 Following Follow.author_sidebar__follow_button_initiator('a-john-hodge') Send Message

A John Hodge

Stop Following

A John Hodge

SeekingAlpha.Initializer.onDOMLoad(function (){Follow.setFfToElements($('followers'),$('followings'),39181)}) if (getURLParam('source') == 'yahoo'){ $('yahoo_finance_link_container').innerHTML = ''; } var page_ad_src = 'http://ad.doubleclick.net/adj/sek.investing-ideas/long-ideas;sz=300x251;x=x;tile=4;d=investing-ideas;pos=b;t=long-ideas;aid=1667152;d=investing-ideas;d=sectors;t=long-ideas;t=us;t=drug-manufacturers-major;t=healthcare;t=article;z=3;a=a-john-hodge;cnt=7;cnt=12;cnt=8;cnt=20;cnt=23;pr=lly;s=bmy;s=mrk;s=lly;'+dart_my_vocation_and_profiles()+'ord='+ord+'?'; add_js_to_ad_call('http://ad.doubleclick.net/adj/sek.investing-ideas/long-ideas;sz=300x250,300x600;x=x;tile=2;d=investing-ideas;pos=t;t=long-ideas;aid=1667152;d=investing-ideas;d=sectors;t=long-ideas;t=us;t=drug-manufacturers-major;t=healthcare;t=article;z=3;a=a-john-hodge;cnt=7;cnt=12;cnt=8;cnt=20;cnt=23;pr=lly;s=bmy;s=mrk;s=lly;'+dart_my_vocation_and_profiles()+'ord='+ord+'?'); SA.Utils.Ads.add({el:$('article_dart_sticky'), HadCreated:false, size:'300x250', delta:50, info:'http://ad.doubleclick.net/adj/sek.investing-ideas/long-ideas;sz=300x251;x=x;tile=4;d=investing-ideas;pos=b;t=long-ideas;aid=1667152;d=investing-ideas;d=sectors;t=long-ideas;t=us;t=drug-manufacturers-major;t=healthcare;t=article;z=3;a=a-john-hodge;cnt=7;cnt=12;cnt=8;cnt=20;cnt=23;pr=lly;s=bmy;s=mrk;s=lly;'+dart_my_vocation_and_profiles()+'ord='+ord+'?'}); if (SA.Pages.Article.see_sb_promo()){ var delegateObj = new Object(); SA.Utils.Ads.setDelegateIframeAction(delegateObj); delegateObj.loadIframeForElement = function(el) { if (el.id == "article_dart_sticky") setTimeout("SA.Pages.Article.freeze_arich_promo()",3000); } } TOP AUTHORS: The Opinion Leaders TOP USERS: StockTalkers | Instablogs Follow us Follow us Mobile Apps  |      RSS Feeds  |  About Us  |  Contact Us Terms of Use | Privacy | Xignite quote data | © 2013 Seeking Alpha document.observe('dom:loaded', function(){ if ($('article_source')) {$('article_source').hide();} if (!is_pro) {$$('.arich_promobox').each(function(o){o.show()})} SA.Pages.Article.primary = "lly"; SA.Pages.Article.init(); if (typeof(propromotion) != "undefined") {propromotion();} if (SA.Pages.Article.alpha_rich_article() || SA.Pages.Article.insiders_report_article()){ update_pro_tracker(0,1,0,0); } if (location.href.match(/source=[a-z0-9_]*email[a-z0-9_]*/)) {createCookie('camefromrta',true);} var pagination_version = ABTest.identity%10; if (SA.Pages.Article.is_roadblock()){ rb = new roadblock('article'); rb.register_show = SA.Pages.Article.roadshow; Mone.event(rb.type,rb.source,"Half Article"); SA.Pages.Article.cut_new(pagination_version); } else { if (!SA.Data.User.loggedIn() && (location.search.match(/[?&]source=(yahoo|nasdaq)/)) && !document.cookie.match(/\b(user_id|user_email|camefromrta)=/)) { SA.Pages.Article.hide_features_for_roadblock(); } } SA.Pages.Article.block_the_blocker(); }); SeekingAlpha.Initializer.AddAfterLoad(function(){ SA.Pages.Article.articlePromo({"allSlugs":["bmy","mrk","lly"],"primarySlug":"lly","dashboard_id":10727,"dashboard_title":"Investing Ideas"}); }); .portfolio_news #content_wrapper .left_content .market_currents ul#mc_news li .bullet{* position: static;* padding:0 6px 6px 1px;}

View the original article here

GPs continue to do battle with government over telehealth

Health secretary Jeremy Hunt supports telehealth which could be a catalyst for service integration and patient empowerment. Photograph: Graham Turner for the Guardian

The greatest benefits from telehealth are yet to come – as a catalyst for service integration and patient empowerment. But these will only be realised if doctors stop looking for opportunities to reject it.

The development of telehealth has been dogged by politicisation of the issue and the way the conclusions of the "whole system demonstrator" programme were interpreted and debated.

Health secretary Jeremy Hunt is firmly committed to telehealth. The day after the publication last November of the first NHS Mandate, identifying its priorities for the coming years, he confirmed that seven pathfinders run by the NHS and councils would be signing contracts to provide access to telehealth for 100,000 people this year.

In the poisonous relationship between the Department of Health and GPs, ministerial support for a big expansion in the technology is interpreted by some doctors as yet another attempt to impose politically motivated change on the way GPs work.

The whole system demonstrator programme showed that telehealth secured significant reductions in mortality and emergency admissions. However, London School of Economics researchers concluded that "telehealth does not seem to be a cost-effective addition to standard support and treatment", claiming that quality adjusted life years provided by the programme cost £92,000, compared with the National Institute for Health and Clinical Excellence ceiling for cost effectiveness of £30,000.

Pitched as the biggest telehealth research project to date, and with a name that gave the misleading impression that it was a definitive answer, the conclusions provided sceptics and cynics with ample ammunition. In particular, some GPs resistant to signing up to telehealth programmes have been citing the demonstrator as evidence that it is a wasteful diversion of scarce resources.

But the weight that has been given to the LSE researchers' analysis is a mistake. It is all but a certainty that the cost for each person will fall as use of the technology becomes far more widespread, and that its effectiveness will increase. Improvements in performance will be driven by targeting its use to the patients who will benefit most and, crucially, by more sophisticated use of the information which it provides.

Telehealth technology is not particularly clever – the really clever part is the human system within which the technology is used. Community nurses, paramedics, GPs, consultants and above all the patients themselves are the essential tools of telehealth. As they become more experienced in analysing and acting upon the information which the technology provides, and different services around the telehealth patient become more integrated, patient benefits and cost effectiveness will rise.

Eventually, other costs will start to fall as telehealth becomes a catalyst for wider system change. At present it is a bolt-on to a care system poorly integrated and not adapted for telehealth. It will require clinicians to work together in new ways, particularly in more effective joint working between community and hospital staff. It offers the prospect of ending the drudgery for both patients and clinicians of thousands of pointless outpatient check-ups which daily clog up hospitals. Users should require fewer GP appointments.

But the biggest benefit will come from providing patients with long term conditions with the encouragement and information to manage them more effectively. Patient empowerment must be central to any plan to exploit this technology.

Talk of "expert patients" and "patient empowerment" far outstrips improvements in the involvement of patients in managing their own care. But telehealth is an opportunity to improve people's understanding of their own health, give them a greater voice in decisions – such as deciding the right response to a particular reading – and perhaps most importantly encourage them to be less dependent on meeting clinical staff.

Telehealth has much to offer a financially constrained and struggling health system which is looking for better ways to meet the needs of older patients and others with long term conditions.

Concern among GPs that the primary care system is being overwhelmed is not matched by a willingness to explore new models of working. Telehealth deserves a better hearing from many doctors than it has had so far.

This article is published by Guardian Professional. Join the Healthcare Professionals Network to receive regular emails and exclusive offers.

View the original article here

Expectations For Eli Lilly's Lung Cancer Drug Rise, But Revenue Concerns Continue

Eli Lilly & Co. (LLY): Expectations For Eli Lilly's Lung Cancer Drug Rise, But Revenue Concerns Continue - Seeking Alpha (function(_,e,rr,s){_errs=[s];var c=_.onerror;_.onerror=function(){var a=arguments;_errs.push(a); c&&c.apply(this,a)};var b=function(){var c=e.createElement(rr),b=e.getElementsByTagName(rr)[0]; c.src="//beacon.errorception.com/"+s+".js";c.async=!0;b.parentNode.insertBefore(c,b)}; _.addEventListener?_.addEventListener("load",b,!1):_.attachEvent("onload",b)}) (window,document,"script","4ffae9d6f05d1da630000008"); if (SA.Data && SA.Data.Cache) { var adata = SA.Data.Cache.get('campaign_content'); }.market_currents_list li .ticker_date_left .mc_list_tickers a{font-weight: normal} var ms_slug = ''; var article_dashboards = '@investing-ideas@sectors@'; var article_sectors_themes = '@long-ideas@us@drug-manufacturers-major@healthcare@article@'; var ratings_hash={}; var ARTICLE_ID = 1667152; var ARTICLE_TYPE = "standard"; var ARTICLE_LOCK = ""; var author_slug = "a-john-hodge"; var pticker_for_ads = "lly"; var time_left; var lock_comments = false; var machine_cookie = readCookie('machine_cookie'); var middle_version = ABTest.identity%10; try { window.sessionStorage.setItem("/article/"+ARTICLE_ID, '1'); } catch (error) {}var mone_article_tags = "{bmy,mrk,lly};;;{healthcare};;;{long-ideas,us,drug-manufacturers-major,investing-ideas};;;{a-john-hodge}"var ord = Math.floor(Math.random()*1000000000);Seeking Alpha Seeking Alpha Portfolio App for iPad Finance (1) var ipadData; SeekingAlpha.Initializer.AddAfterLoad(function(){ if (SA.Utils.Env.isIPad && !/3/.test(SA.Data.Cookies.get("user_devices"))){ Mone.event("ipad_promotion_top","top_ipad_banner_large","ipad_promotion_displayed"); ipadData = new SA.Data.iPad(); ipadData.instanceName = "ipadData"; var responseHandler = new Object(); responseHandler.handleResponse = function(data){ if (!data.averageUserRating) return; var stars = data.averageUserRating Home | Portfolio | Market Currents | Investing Ideas | Dividends & Income | ETFs | Macro View | ALERTS | PRO   This article was sent to 7,224 people who get email alerts on  . Which cover: new articles | breaking news | earnings results | dividend announcements Get email alerts on   » This article was sent to 337,202 people who get the Investing Ideas newsletter. Get the Investing Ideas newsletter » Expectations For Eli Lilly's Lung Cancer Drug Rise, But Revenue Concerns Continue Aug 30 2013, 15:47 by: A John Hodge  |  about: LLY, includes: BMY, MRK BOOKMARKED / READ LATER Bookmarked

Added to your bookmarks on the Seeking Alpha homepage

Remove Bookmark new SA.Pages.Article.bookmark("_top");

Eli Lilly Co. (LLY), in desperate need of a blockbuster new drug, may have struck gold when its lung cancer drug, necitumumab (IMC-11F8), was shown to extend patient survival in a phase 3 study. Necitumumab has met its primary endpoint in improving overall survival in patients who received the drug in combination with gemcitabine and cisplatin as a first-line therapy for metastatic squamous non-small cell lung cancer (NSCLC) when compared with chemotherapy alone. Necitumumab is a fully human IgG1 monoclonal antibody designed to block the ligand binding site of the human epidermal growth factor receptor (EGFR), which is a target in several anti-cancer treatments because it sparks cancer progression, both by promoting angiogenesis, or the formation of new blood vessels for tumors, and by inhibiting apoptosis, or cell death.

Necitumumab: From The Ash Heap To Blockbuster Drug?

Lilly expects to submit necitumumab for approval to the Food and Drug Administration (FDA) by the end of the year and, if approved, it could be a great revenue source for the company. Globally, the non-small-cell lung cancer (NSCLC) drug market is expected to reach $6.9 billion in 2019 and climb to $7.9 billion in 2022. There are over 1.2 million new cases of lung cancer diagnosed every year and over 1 million lung cancer patients will die each year, and non-small cell lung cancer (NSCLC) accounts for approximately 80% of all lung cancers. The positive results from the drug came as a surprise according to Mark Schoenebaum, analyst with ISI Group LLC, since not so long ago analysts had given up on necitumumab, with "basically zero" expectations as the drug failed in a prior non-squamous lung cancer trial. Bristol Myers Squibb (BMY), Lilly's partner in the drug, even gave it up as the company terminated the collaboration in late 2012. Mr. Schoenebaum added however, "We really need to see the full data to understand risk/benefit."

While necitumumab could be a potent boost to Lilly's product portfolio, the drug could also bring a much-needed new therapy for NSCLC, a cancer that has been proven difficult to treat with the current drugs on the market, such as Genentech's Avastin, which directly target tumors, as opposed to more broadly active chemotherapy drugs. Richard Gaynor, vice president of product development and medical affairs for Lilly Oncology, said in a prepared statement, "If approved, necitumumab could be the first biologic therapy indicated to treat patients with squamous lung cancer." And it is quite conceivable that the drug will dominate the NSCLC market with sales expected to reach $1.75 billion by 2022.

But necitumumab is not without some possible stiff competition, as Merck (MRK) plans to initiate late-stage clinical trials of lambrolizumab in the third quarter of 2013 for both non-small cell lung cancer and advanced melanoma. Lambrolizumab, which received "breakthrough status" in late April by the FDA, is an investigational antibody therapy designed to disrupt the action of the immune checkpoint protein PD-1 and therefore inhibit the ability of some cancers to evade the body's immune system.

Generics Continue To Chip Away At Revenue

Eli Lilly will be in need of new successful drugs to market, as sales of its $4.99 billion blockbuster treatment to combat depression, Cymbalta, are expected to plummet when the company loses U.S. patent protection in December. Cymbalta accounted for 22% of the $22 billion in global product sales in 2012, and $1.5 billion in second quarter of 2013. When a blockbuster drug falls off patent it can be devastating to revenue, as witnessed with Zyprexa, Lilly's once best-selling schizophrenia treatment, which had $2.17 billion in domestic sales the year before its patent expired. However, after the drug came off patent the company sold a mere $360 million in the U.S. as 63% of its sales were gobbled up by generic competition. And Lilly will experience more revenue declines as some of the company's other drugs fall off patent, like its $2.4 billion mealtime insulin, Humalog, which expires in June 2014. And the company will also lose its $1 billion osteoporosis medication, Evista, which falls off patent in March of 2014.

Solid Pipeline May Bring Solid Revenues Down The Line

The future is not glum for Lilly, as the company has spent heavily on R&D over the past few years, with $5.28 billion on R&D in 2012, and has no less than 60 potential new drugs in testing, including three in regulatory review and ten in phase 3 trials. For example Lilly submitted empagliflozin for a new drug application (NDA) for the treatment of type 2 diabetes in adults. Empagliflozin is one of a new class of glucose-lowering drugs which work by increasing urinary glucose excretion with a consequent lowering of plasma glucose levels. The company expects to receive a decision by the end of the second quarter 2014.

Lilly's advanced gastric cancer drug, ramucirumab, showed promising results from its phase 3 trials as the drug showed the median overall survival was better in 238 patients who received ramucirumab than in the 117 patients who received placebo. Earlier this year, the company initiated a fast track review to the FDA. Lilly also submitted the drug for approval for breast cancer patients, which could be where the real revenue success for the drug would be found. According to a recent CitiGroup report, peak sales potential could exceed $3 billion.

Cost Cutting: A Leaner Lilly In The Works

Ely Lilly's management team feels confident that over the next few years it will be able to mitigate the negative revenue impact of its drugs' patent expirations with successful launches of its late stage portfolio. The company is also mitigating its lost revenue with a series of cost cuts by slashing jobs and raising prices on Cymbalta before the patent expires. And these cuts have helped as Lilly's second-quarter earnings are up with reported earnings of $1.21 billion while worldwide revenues rose 6% to $5.93 billion, beating Wall Street expectations of $5.82 billion. Lilly also raised its EPS guidance for the year, to earn between $4.28 and $4.38 per share for the year on revenues between $22.6 billion and $23.4 billion.

The cost cutting will continue according to Lilly's Senior Director of Global Corporate Communications Ed Sagebiel, "We continue to face the most significant challenges in our history." The company will suspend base pay increases for most of its employees next year till 2015. Plus the company will be reducing bonuses by 25% for 2014, and it won't be paid out till 2015. These cuts are expected to shave $400 million through 2016. In May the company announced that roughly 1,000 sales staffers would be laid off, which amounted to 40% of the U.S. salesforce.

Ely Lilly is a $50.09 billion market cap company. Year-over-year the stock is up just under 20%, however the stock's growth has slowed from its late April high of $58.40. The company still has a solid dividend with a yield of 3.74, and carries one of the lower P/E ratios of the major drug companies, at 11.67. And the company holds more than $4.6 billion in short-term liquidity.

Conclusion

Big Pharma is experiencing a glut of generics eating away at what were once their revenue cash cows. However there seems to be new cash cows working their way down the pipelines. Lilly too has been hit hard and will continue to be hit hard by the generics, though the company has done some much needed "belt tightening" to get it through the tough times. And CEO John Lechleiter is quite confident that these measures will get them through, as he commented in a prepared statement: "Continued operating and financial discipline, along with a maturing pipeline of potential new medicines, gives me great confidence in the company's ability to meet the challenges we face from upcoming patent expirations and to resume growth after 2014."

While Lilly may experience a rocky road for the next few quarters, for an excellent dividend stock and a patient investor, Eli Lilly, with its cost cutting measures and perhaps a few blockbuster drugs in the pipeline, should be a good long-term stock to have in one's portfolio.

Source: Expectations For Eli Lilly's Lung Cancer Drug Rise, But Revenue Concerns Continue

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. (More...)

SA.Pages.Article.handleDisclosures(); This article was sent to 7,224 people who get email alerts on  . Get email alerts on   » This article was sent to 337,202 people who get the Investing Ideas newsletter. Get the Investing Ideas newsletter » Comments () This article has   comments. To read them or add your own, click here. The #1 Portfolio App is Now on iPad! Get instant notifications & never miss a critical update on your stocks! Which Seeking Alpha App is best for you? Seeking Alpha Portfolio Tech Investor ETF investor Energy Investor Email me a link to open from my phone: Continue 7,224  people received this article by email alert
Add your email to get alerts on   too: Get email alerts on   » This article was sent to 337,202 people who get the Investing Ideas newsletter. Get the Investing Ideas newsletter » Tagged: Investing Ideas, Long Ideas, Healthcare, Drug Manufacturers - Major Share this article with a colleague Tweet SeekingAlpha.Initializer.AddAfterLoad(function(){ new Ajax.Updater({success: 'widget_email_count'}, '/form/ajax_get_email_count', { method: 'get', parameters: { item_name: 'Article', article_id: '1667152' } }); }); BOOKMARKED / READ LATER Bookmarked

Added to your bookmarks on the Seeking Alpha homepage

Remove Bookmark new SA.Pages.Article.bookmark("_bottom"); var author_info_popup_timeout; About the author: A John Hodge John Hodge is an active trader who follows the technology/biotech sector specifically. I have been successfully trading stocks for the last 16 years and still thank those that pointed me in the direction of Qualcomm and Amgen many years ago. I believe research and timing is the key to long term... More A John Hodge Articles (40) Instablog (1) Comments (22) if (/stats viewer/.test(readCookie("user_perm"))) document.write("Earnings"); Profile 219 Followers 46 Following Follow.author_sidebar__follow_button_initiator('a-john-hodge') Send Message

A John Hodge

Stop Following

A John Hodge

SeekingAlpha.Initializer.onDOMLoad(function (){Follow.setFfToElements($('followers'),$('followings'),39181)}) if (getURLParam('source') == 'yahoo'){ $('yahoo_finance_link_container').innerHTML = ''; } var page_ad_src = 'http://ad.doubleclick.net/adj/sek.investing-ideas/long-ideas;sz=300x251;x=x;tile=4;d=investing-ideas;pos=b;t=long-ideas;aid=1667152;d=investing-ideas;d=sectors;t=long-ideas;t=us;t=drug-manufacturers-major;t=healthcare;t=article;z=3;a=a-john-hodge;cnt=7;cnt=12;cnt=8;cnt=20;cnt=23;pr=lly;s=bmy;s=mrk;s=lly;'+dart_my_vocation_and_profiles()+'ord='+ord+'?'; add_js_to_ad_call('http://ad.doubleclick.net/adj/sek.investing-ideas/long-ideas;sz=300x250,300x600;x=x;tile=2;d=investing-ideas;pos=t;t=long-ideas;aid=1667152;d=investing-ideas;d=sectors;t=long-ideas;t=us;t=drug-manufacturers-major;t=healthcare;t=article;z=3;a=a-john-hodge;cnt=7;cnt=12;cnt=8;cnt=20;cnt=23;pr=lly;s=bmy;s=mrk;s=lly;'+dart_my_vocation_and_profiles()+'ord='+ord+'?'); SA.Utils.Ads.add({el:$('article_dart_sticky'), HadCreated:false, size:'300x250', delta:50, info:'http://ad.doubleclick.net/adj/sek.investing-ideas/long-ideas;sz=300x251;x=x;tile=4;d=investing-ideas;pos=b;t=long-ideas;aid=1667152;d=investing-ideas;d=sectors;t=long-ideas;t=us;t=drug-manufacturers-major;t=healthcare;t=article;z=3;a=a-john-hodge;cnt=7;cnt=12;cnt=8;cnt=20;cnt=23;pr=lly;s=bmy;s=mrk;s=lly;'+dart_my_vocation_and_profiles()+'ord='+ord+'?'}); if (SA.Pages.Article.see_sb_promo()){ var delegateObj = new Object(); SA.Utils.Ads.setDelegateIframeAction(delegateObj); delegateObj.loadIframeForElement = function(el) { if (el.id == "article_dart_sticky") setTimeout("SA.Pages.Article.freeze_arich_promo()",3000); } } TOP AUTHORS: The Opinion Leaders TOP USERS: StockTalkers | Instablogs Follow us Follow us Mobile Apps  |      RSS Feeds  |  About Us  |  Contact Us Terms of Use | Privacy | Xignite quote data | © 2013 Seeking Alpha document.observe('dom:loaded', function(){ if ($('article_source')) {$('article_source').hide();} if (!is_pro) {$$('.arich_promobox').each(function(o){o.show()})} SA.Pages.Article.primary = "lly"; SA.Pages.Article.init(); if (typeof(propromotion) != "undefined") {propromotion();} if (SA.Pages.Article.alpha_rich_article() || SA.Pages.Article.insiders_report_article()){ update_pro_tracker(0,1,0,0); } if (location.href.match(/source=[a-z0-9_]*email[a-z0-9_]*/)) {createCookie('camefromrta',true);} var pagination_version = ABTest.identity%10; if (SA.Pages.Article.is_roadblock()){ rb = new roadblock('article'); rb.register_show = SA.Pages.Article.roadshow; Mone.event(rb.type,rb.source,"Half Article"); SA.Pages.Article.cut_new(pagination_version); } else { if (!SA.Data.User.loggedIn() && (location.search.match(/[?&]source=(yahoo|nasdaq)/)) && !document.cookie.match(/\b(user_id|user_email|camefromrta)=/)) { SA.Pages.Article.hide_features_for_roadblock(); } } }); SeekingAlpha.Initializer.AddAfterLoad(function(){ SA.Pages.Article.articlePromo({"allSlugs":["bmy","mrk","lly"],"primarySlug":"lly","dashboard_id":10727,"dashboard_title":"Investing Ideas"}); }); .portfolio_news #content_wrapper .left_content .market_currents ul#mc_news li .bullet{* position: static;* padding:0 6px 6px 1px;}

View the original article here

GPs continue to do battle with government over telehealth

Health secretary Jeremy Hunt supports telehealth which could be a catalyst for service integration and patient empowerment. Photograph: Graham Turner for the Guardian

The greatest benefits from telehealth are yet to come – as a catalyst for service integration and patient empowerment. But these will only be realised if doctors stop looking for opportunities to reject it.

The development of telehealth has been dogged by politicisation of the issue and the way the conclusions of the "whole system demonstrator" programme were interpreted and debated.

Health secretary Jeremy Hunt is firmly committed to telehealth. The day after the publication last November of the first NHS Mandate, identifying its priorities for the coming years, he confirmed that seven pathfinders run by the NHS and councils would be signing contracts to provide access to telehealth for 100,000 people this year.

In the poisonous relationship between the Department of Health and GPs, ministerial support for a big expansion in the technology is interpreted by some doctors as yet another attempt to impose politically motivated change on the way GPs work.

The whole system demonstrator programme showed that telehealth secured significant reductions in mortality and emergency admissions. However, London School of Economics researchers concluded that "telehealth does not seem to be a cost-effective addition to standard support and treatment", claiming that quality adjusted life years provided by the programme cost £92,000, compared with the National Institute for Health and Clinical Excellence ceiling for cost effectiveness of £30,000.

Pitched as the biggest telehealth research project to date, and with a name that gave the misleading impression that it was a definitive answer, the conclusions provided sceptics and cynics with ample ammunition. In particular, some GPs resistant to signing up to telehealth programmes have been citing the demonstrator as evidence that it is a wasteful diversion of scarce resources.

But the weight that has been given to the LSE researchers' analysis is a mistake. It is all but a certainty that the cost for each person will fall as use of the technology becomes far more widespread, and that its effectiveness will increase. Improvements in performance will be driven by targeting its use to the patients who will benefit most and, crucially, by more sophisticated use of the information which it provides.

Telehealth technology is not particularly clever – the really clever part is the human system within which the technology is used. Community nurses, paramedics, GPs, consultants and above all the patients themselves are the essential tools of telehealth. As they become more experienced in analysing and acting upon the information which the technology provides, and different services around the telehealth patient become more integrated, patient benefits and cost effectiveness will rise.

Eventually, other costs will start to fall as telehealth becomes a catalyst for wider system change. At present it is a bolt-on to a care system poorly integrated and not adapted for telehealth. It will require clinicians to work together in new ways, particularly in more effective joint working between community and hospital staff. It offers the prospect of ending the drudgery for both patients and clinicians of thousands of pointless outpatient check-ups which daily clog up hospitals. Users should require fewer GP appointments.

But the biggest benefit will come from providing patients with long term conditions with the encouragement and information to manage them more effectively. Patient empowerment must be central to any plan to exploit this technology.

Talk of "expert patients" and "patient empowerment" far outstrips improvements in the involvement of patients in managing their own care. But telehealth is an opportunity to improve people's understanding of their own health, give them a greater voice in decisions – such as deciding the right response to a particular reading – and perhaps most importantly encourage them to be less dependent on meeting clinical staff.

Telehealth has much to offer a financially constrained and struggling health system which is looking for better ways to meet the needs of older patients and others with long term conditions.

Concern among GPs that the primary care system is being overwhelmed is not matched by a willingness to explore new models of working. Telehealth deserves a better hearing from many doctors than it has had so far.

This article is published by Guardian Professional. Join the Healthcare Professionals Network to receive regular emails and exclusive offers.

View the original article here