Lilly Reports on Outcome of Phase III Study of Arzoxifenex (NYSE: LLY) announced today that initial results from its pivotal, five-year, Phase III GJAD "GENERATIONS" trial for arzoxifene met its primary endpoints of significantly reducing the risk of vertebral fracture and invasive breast cancer in postmenopausal women.

However, the study failed to demonstrate a statistically significant difference in key secondary efficacy endpoints, such as non-vertebral fractures, clinical vertebral fractures, cardiovascular events and cognitive function, compared to placebo.

In addition, certain adverse events, including venous thromboembolic events, hot flushes and gynecological-related events, were reported more frequently in the arzoxifene group compared with placebo. After reviewing the overall clinical profile of arzoxifene in light of currently available treatments, including Lilly's own osteoporosis products, the company has decided not to submit the compound for regulatory review. The final GJAD "GENERATIONS" study results will be published in 2010.

"At Lilly, our goal is to provide innovative therapies that result in better patient outcomes," said M. Johnston Erwin, global brand development leader for the musculoskeletal platform at Lilly. "While arzoxifene met its primary efficacy objectives in this study, we are disappointed that the GENERATIONS data did not convincingly demonstrate that arzoxifene would represent a meaningful advancement in the treatment of osteoporosis."

"The results of arzoxifene's GENERATIONS study serve as a reminder of the high risks associated with pharmaceutical innovation," commented John Lechleiter, Ph.D., Lilly chairman and chief executive officer. "Despite this setback, our business remains strong, supported by the growth of key marketed products. In addition, we have the largest and most promising clinical stage pipeline in our history with more than 60 molecules in clinical development, including a late-stage pipeline targeting unmet medical needs in areas such as Alzheimer's disease, cancer and diabetes."

The decision not to submit arzoxifene for regulatory review is expected to result in a third-quarter charge to earnings of approximately $.03 to $.04 per share. The company confirmed its previous 2009 earnings per share guidance range of $4.14 to $4.24 on a reported basis, or $4.20 to $4.30 on a pro forma non-GAAP basis.

Lilly is in the process of contacting the clinical investigators conducting ongoing arzoxifene clinical trials. Subject to protocol requirements, the trials will be discontinued, and the patients currently enrolled will be encouraged to speak with a healthcare professional regarding other therapeutic options. Patients involved in arzoxifene clinical studies who have questions should contact their study investigator.