Lilly Inks Deal Worth up to $12.5 Billion with Feds for its Monoclonal Antibody — $12,500 per dose for up to 680K Doses

Oct 29, 2020 | Investor Watch, LY-CoV555, Monoclonal Antibody, News, Price Watch

Lilly Inks deal worth up to $12.5 Billion with Feds with its Monoclonal Antibody --$12,500 per dose for up to 680K Doses

On Oct. 9, TrialSite reported Eli Lilly could be on the verge of securing an emergency use authorization (EUA) from the U.S. Food and Drug Administration (FDA) for its monoclonal antibody originally known as LY-COV555. In parallel, the Indianapolis-based American pharmaceutical company announced the most recent findings of this investigational product, now published in the New England Journal of Medicine. The data derives from the Phase 2 BLAZE-1 study investigating the efficacy of bamlanivimab (LY-CoV555) in the COVID-19 outpatient setting. Its another monoclonal antibody that has been paused for safety review. Importantly, Lilly just inked a deal with the U.S. government, giving the American consumer a glimpse into the price point of the drug. The U.S. government will pay $375 million for 30,000 doses of the investigational product to treat COVID-19 or $12,500 per dose. The government has an option for the purchase of an additional 650,000 doses (under the same terms). The deal is contingent on the trigger that the FDA authorizes the EUA.

TrialSite includes the underlying Lilly press release while offering a breakdown of this unfolding important news for the TrialSite Network.

What is this investigational product?

As TrialSite has written extensively on the development of this investigational product, Lilly secured a partnership with University of British Columbia (UBC) spinoff AbCellera to identify monoclonal antibody targets. This was done along with the help from scientists at the National Institute of Allergy and Infectious Diseases (NIAID) Vaccine Research Center. Lilly’s scientists then took the identified candidate and in less than three months developed what is now a neutralizing IgG1 monoclonal antibody (mAb) dedicated against the spike protein of SARS-CoV-2. Designed to block viral attachment and entry into human cells, this neutralizing antibody can possibly prevent and treat COVID-19. The original candidate was first identified from a blood sample taken from one of the first U.S. patients who recovered from COVID-19.

What is the total deal size worth?

Well since the terms are the same for the option, this deal amounts to up to $19,500,000,000 ($19.5b). Could that be the case? It appears so because in the press release, Lilly declares the option for the purchase for up to 650,000 doses is at the exact same terms as the initial purchase.

Why didn’t the U.S. negotiate a volume-based discount?

We can’t be sure unless somehow we secured access to those that did the deal. When read literally, this means that the $12,500 the U.S. government (Taxpayer) is paying for 30,000 of the investigational doses, is what they will pay for up to 650,000 as the terms are the same according to the press release.

Is this drug proven to work?

No. It hasn’t even been given emergency use authorization (EUA) and even if its does, that doesn’t mean it will be ultimately authorized as a marketable drug by the U.S. FDA.

But does the drug show promise?

Absolutely. Enough data has been provided that TrialSite predicted the probability was good to reach the EUA milestone.

Is the U.S. government taking a different approach combatting COVID-19 than many other governments?

Yes. In places like China, Russia and India, there aren’t the funds or overall wherewithal to take this powerful but unbelievably expensive approach to target COVID-19.

What does the American consumer pay?

Well, the announcements have always indicated that the U.S. government pays but not the consumer. But that’s not totally true. First, the U.S. government uses the taxpayer money, so in one way Americans pay one way or another. Second, health systems will be able to charge for various delivery services and, given the price points, some American health systems can arrange the actual costs to get this medication could be quite high, despite it being “free” to the American consumer.

How is the federal government working with health systems to arrange for the distribution and allocation of this drug?

The press release revealed not much detail. Lilly will participate in the Operation Warp Speed and a national distributor to finalize distribution plans and shipping preparations should the EUA be granted. This means that the plans haven’t been created yet in all reality. Lilly acknowledges that this drug and its administration will cause some “unique challenges to the healthcare system.”

How is the drug administered and who will benefit first?

It is delivered in the hospital or some form of health center via intravenous administration to patients with mild to moderate COVID-19.

When would the drug be delivered?

The parties negotiated that the delivery of the drug would occur over the two months following an EUA.

What’s Lilly’s manufacturing capacity?

The Indiana-based company projects it can make up to one million doses of the experimental drug at 700mg a dose by the end of 2020. They inform in their press release that 100,000 doses could be ready to ship within days of authorization for worldwide use. Interestingly, they aren’t securing that first 100,000 does to America despite the large deal commitment.

Lilly suggests by the start of Q1 2021 they can significantly ramp up production given its robust supply chain and five active pharmaceutical ingredient (API) manufacturing sites worldwide. Lilly put up the capital for at risk manufacturing, hence one rationale for the price points.

Do we know what the price point will be after the first 680,000 doses?

No, it could go way up and there will be no government guarantees for deferral of out of pocket expenses.

Has POTUS in some way helped market both this investigational drug and those from Regeneron?

Yes. During an Oct. 7 video on Twitter, he claimed it was a cure.

Although the ACTIV-3 study also involves LY-CoV555 and was placed on a safety pause, did that impact the EUA for the data based on BLAZE-1?

No. On Oct. 17, TrialSite reported the ACTIV-3 study, which also involves this drug, was placed on pause due to safety concerns. It didn’t impact any other studies or the EUA even though it involved the same drug.

Did Lilly pull off an incredible feat such far?

Yes. They put together the right partnership with AbCellera and then their scientists executed with speed and precision as have their clinical trial operations. But so has Regeneron and many other pharmaceutical companies in this crisis.

Source: Lilly

1 Comment

  1. Bob Loblaw

    Um. It’s 300,000 doses at $1250 per dose. What would Rosanna Danna say at this point?

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