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`Page 1 of 5
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`By Learning From Failures,
`Keeps
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`Matt: Skills
`Bi‘. Nyikiza
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`3y THOMAS M_ BURTON
`Sttfl Reporter of THE WALL STREET JOURNAL
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`INDIANAPOLIS -— Five years ago, Eli Lilly & Co. had high hopes for an experimental
`chemotherapy drug called Alimta. But after three patients taking Alimta died suddenly in 1999,
`Lilly halted trials of the drug. It looked like a fatal blow for Alimta —- despite strong evidence that
`it could reverse tumor growth.
`
`Paolo Paoletti, the Lilly doctor mnning the trials, begged for two weeks to save the drug. I-Ie
`teamed up with a Rwandan mathematician. Clet Nyikiza, whom Lilly keeps on staff largely to
`study drug failures. Dr. Nyilciza had been fascinated by why complex processes fail ever since his
`grandfather taught him as a boy in East Africa the telltale signs of an unsuccessful antelope hunt.
`By analyzing blood samples and medical records, Messrs. Paoletti and Nyikiza identified a
`surprising problem with an unexpectedly simple solution.
`
`Today, Alimta is an approved treatment for mesothelioma, a rare type of cancer caused by
`exposure to asbestos. It's under Food and Drug Administration consideration as a treatment for
`lung cancer, a much more common ailment.
`
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`Alimta's resurrection helps illustrate why Lilly is coming
`out with a flood of new medicines even as many of its.
`competitors struggle to replace blockbuster drugs coming
`off patent. Lilly has long had a culture that looks at failure
`as an inevitable part of discovery and encourages
`scientists to take risks. If a new drug doesn't work out for its intended use, Lilly scientists are
`taught to look for new uses for a drug. In the early l9.90s, W. Leigh Thompson, Lilly's chief
`scientific officer, initiated "failure parties" to commemorate excellent scientific work, done
`efficiently, that nevertheless resulted in failure.
`
`Other drug companies are also seeing the importance of tolerating -- and learning from -- failure, a
`valuable strategy since about 90% of experimental drugs in the industry fail. For example, Pfizer
`Inc. originally developed the blockbuster impotence drug Viagra to treat angina, or severe heart
`pain.
`
`Lilly Ex. 2091
`Sandoz V. Lilly IPR2016-00318
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`Lilly Ex. 2091
`Sandoz v. Lilly IPR2016-00318
`
`
`
`WSJ.com — By Leaming From Failures, Lilly Keeps Drug Pipeline Full
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`Page 2 of 5
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`Lilly has taken this approach to unusual lengths. It assigns someone -- often a team of doctors and
`scientists -- to retrospectively analyze every cornponnd that
`fafled at any poi_n_t i_n_ human.
`clinical trials. Blair Sheppard, a management professor at Duke University who's done consulting
`work for Lilly and other pharmaceutical companies. says that Lilly developed "a formalized and
`thoughtful process in which it reviewed failures more honestly, more deeply and started the
`process sooner than anyone else."
`
`Many Lilly drugs have risen from failure. Evista, now a $1 billion-a-year
`drug for osteoporosis, was a failed contraceptive. Strattera. a hot-selling
`drug for attention deficit/hyperactivity disorder, bombed out as an
`antidepressant. A promising cardiovascular drug called a PPAR~alpha~
`1 agonist, which lowers fat levels in the blood, arose from a failed asthma
`project. The antidepressant Cymbalta, for which Wall Street has high hopes,
`failed in its original trials until a Lilly scientist upped the dosage.
`
`
`
`In an industry where getting two new drugs approved by the FDA is
`.: considered a banner year, Lilly already has six approved so far in 2003 and
`= 2004 combined and hopes to get another two approved by year-end. And it
`- has another 11 promising drugs in the middle- to late-stage pipeline.
`
`Paolo Paoletti
`
`Still, Lilly's share price has been in the doldrums because of other factors. In August 2001, the
`company's patent exclusivity on the antidepressant Prozac expired and most of the $2.6 billion in
`revenue from the drug quickly evaporated. More recently, Lilly was hurt badly when the FDA
`blocked approval of some new drugs for more than a year because of quality and record-keeping
`problems at two Indianapolis Lilly plants. In addition, some of Lilly's drugs, including Evista, the
`osteoporosis medicine, have run into tougher-than-expected competition. Just last week, Smith
`Barney lowered its profit outlook for the drug maker.
`
`Lilly sales rose to $12.58 billion in 2003 from $10 billion in 1999, including a 14% jump in 2003
`from 2002. But earnings per share slipped some over the same period, to $2.37 a share in 2003
`front $2.46 a share in 1999. Without one-time gains and charges, earnings per share rose to $2.58
`2003 from $2.28 in 1999.
`
`The pipeline of new drugs has helped keep Lilly's price-to-earnings ratio consistently at the high-
`end of the drug industry. Lilly traded yesterday in the New York Stock Exchange at $72.25 a
`share, down $1.15 for the day.
`
`The story of Aiimtas salvation begins in 1992 with an out-and-out failure: a
`new drug called lomotrexol that made patients ill in its trials. For the post-
`mortem analysis, Lilly tapped Dr. Nyikiza, the Rwandan mathematician,
`who specialized in the failure analysis of complex systems —— a branch of
`math called stochastic processes.
`
`Dr. Nyikiza, who grew up on a peanut and banana farm, developed this
`interest on boyhood hunting trips in Rwanda and neighboring Tanzania.
`From his grandfather, he learned all about the myriad factors that lead to a
`successful hunt or a disastrous one. Among them were wind speed and
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`antelope," his grandfather cautioned, because lone antelopes tend to attract
`lone lions.
`
`
`
`Lilly Ex. 2091
`Sandoz V. Lilly IPR2016-00318
`
`Lilly Ex. 2091
`Sandoz v. Lilly IPR2016-00318
`
`
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`WSJ.com — By Leaming From Failures, Lilly Keeps Drug Pipeline Full
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`Page 3 of 5
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`Dr. Nyikiza ended up in a gifted program at a Rwandan high school run by Jesuit missionaries.
`After getting a bachelor's degree in statistics and applied economics in Rwanda, Dr. Nyikiza
`worked on a project funded by the U.S. Agency for International Development, doing population
`analysis for the government of Rwanda. Then the U.S. agency and the Rwandan government sent
`him to Indiana University where he got a doctorate in mathematics.
`
`Before joining the drug industry, Dr. Nyikiza analyzed failures in everything from aircraft engines
`to truck transmissions. In a job for the Swiss National Science Foundation, he looked at what
`makes certain paper money prone to counterfeiting.
`
`In 1990, :1 research executive from Syntex Corp., since acquired by Roche Holding AG, sat next
`to him on a flight from Zurich to Chicago and concluded Dr. Nylkiz-a's expertise would
`useful
`in an industry where almost everything fails. He moved to Lilly from Syntex in 1993.
`
`At the time, Lilly was trying to learn from the failure of lomotrexol. Like Alimta, lomotrexol had
`induced neutropenia, a white -blood-cell disease causing immune deficiency, severe diarrhea and
`sometimes death. Lilly asked Dr. Nyikiza to find out
`the drug failed. lie and three colleagues
`spent most of a year on the effort. analyzing blood samples and traveling to question world
`experts. They settled on 64 blood markers that might predict which patients would be afflicted by
`the devastating side effect. Finally, one called homocysteine emerged. Every patient sickened by
`lomotrexol had high levels of homocysteine, a common amino acid.
`
`Homocysteine is produced when human cells lack the vitamin folic acid. The conclusion from Dr.
`Nyikiza's team -- that the patients who died had a deficiency in folic acid -- would become crucial
`during the crisis in the Alimta mesothelioma study.
`
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`personnel. construction workers and others exposed to asbestos. In very early tests, Alimta shrank
`mesothelioma tumors in five of 12 patients -- a startling success. By 1999, Lilly undertook clinical
`studies in 90 people with mesothelioma, mostly in Europe.
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`Another occurred in the fall. Neutropenia is a white-blood cell deficiency that can lead to
`dangerous infections in which the bowel cells die. By November, a third death had occurred.
`
`Dr. Paoletti decided Alimta just seemed too unpredictable. l-le halted the trial, notifying U.S. and
`European regulators and more than 200 clinical investigators. To Dr. Nyhza, though, the
`symptoms seemed to resemble those of the lomotrexol patients seven years earlier. He persuaded
`Dr. Paoletti that they should. once again, seek out leading authorities on the class of drug, called
`antifolates, that includes lomotrexol and Alimta. Among other things, these drugs deprive cancer
`cells of folic acid needed to proliferate. Dr. Paoletti in turn went to Lilly senior executives,
`pleading for and winning two weeks in which Alimta might be saved. The Alimta team starting
`pulling all-nighters to meet the deadline, analyzing medical records and blood samples.
`
`Once again, it emerged that patients with the most severe side effects were those with high
`homocysteine -- and low folic acid -- in their blood. The researchers decided on a disarmingly
`simple solution: Give all patients folic acid pills in addition to their close of Alimta. "When I first
`heard about it, I thought it was crazy," says Bruce A. Chabner, clinical director of the
`Massachusetts General Hospital Cancer Center.
`
`Lilly Ex. 2091
`Sandoz V. Lilly IPR20l6-00318
`
`Lilly Ex. 2091
`Sandoz v. Lilly IPR2016-00318
`
`
`
`WSJ.com — By Leaming From Failures, Lilly Keeps Drug Pipeline Full
`
`Page 4 of 5
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`Lilly resumed the trial, with folic acid supplements. One concern was that the vitatnin pills might
`cure toxicity, yet destroy the drug's effectiveness. As the trial resumed. so did the tension. A week
`passed, and no severe side effects arose. Two weeks turned into a month, then several months.
`The severe toxic side effect had almost disappeared.
`
`A1imta's effectiveness hadn't been lessened at all. It lengthened by several months the average
`survival time of patients with mesothelioma compared with patients taking cisplatin, another type
`of chemotherapy used for this disease.
`
`Mesothelioma is a fairly rare cancer, with about 15,000 new cases world-wide each year. Lilly has
`also been testing Alimta against nonsmall—cell lung cancer, the most common type of lung cancer,
`the No. 1 killer among cancers. Lilly has submitted data to the FDA, for possible further approval
`of Alimta, showing that Alimta lengthens survival as much as Taxotere, a standard chemotherapy
`treatment for nonsmall-cell lung cancer. But Lilly's research shows that Alimta has a significantly
`better toxicity profile -- no hair loss, and only 5% of patients had any neutropenia, compared with
`40% of patients on Taxotere.
`
`"Another company might have given up on Alimta," says Dr. Chabner.
`
`Other promising new Lilly products have come out of earlier failures, including the one—time
`antidepressant that flopped. When some Harvard psychiatrists wanted to try another Lilly drug to
`treat attention deficit/hyperactivity disorder. a Lilly doctor named John Heiligenstein got them to
`try Strattera instead. Dr. l-ieiligellsteirl knew that Strattera worked on the chemical rlorepirlep‘ru'ilie
`and that this brain chemical seemed to play a role in the condition. Strattera, competing with
`stimulants such as Ritalin and Adderall, has achieved sales of $511 million since its January 2003
`launch.
`
`Some cardi vwcular drugs in Lilly's pipeline have their origins in a failed asthma drug prcwam.
`Patrick I. Eacho, now Lilly's head of atherosclerosis drug discovery, was in the company
`toxicology department in 1983. He terminated the asthma project because the drug stimulated
`receptor cells in the liver and elsewhere. resulting in lowered fat levels in the blood; scientists
`didn't understand why this effect was occurring.
`
`Dr. Eacho and colleagues suspected the lower fat levels could be a good thing. He grew intrigued
`and kept studying the phenomenon even though there was no evidence it would lead to a
`marketable drug. His research was paid for by a Lilly "blue—sky fund" that pays for projects that
`don't appear to make immediate commercial sense. Lilly scientists generally are encouraged to
`spend 10% to 20% of t_hei_r time on such bl1_1e—sk_y projects. Dr. L.ach_o's research now has led in
`part to the PPAR-alpha drug that's in trials for vascular disease because of its fat-lowering
`tendencies. There are also seven other related drugs under study at Lilly for vascular disease and
`diabetes.
`
`
`
`Lilly drugs arising from earlier failures
`
`Second Chances
`
`Lilly Ex. 2091
`Sandoz V. Lilly IPR20l6-00318
`
`Lilly Ex. 2091
`Sandoz v. Lilly IPR2016-00318
`
`
`
`WSJ.c0m — By Leaming From Failures, Lilly Keeps Drug Pipeline Full
`
`Page 5 of 5
`
`Drug History Status
`
`
`Strattera
`Marketed for ADHD treatment
`Failed in depression studies
`
`Marketed for osteoporosis
` Marketed for mesothelioma
`Cymbalta
`Reviewed by FDA for depression
`
`Failed for birth control
`Trial had been stopped
`Failed at lower dose
`
`Failed frailty study
`
`is Failed for nsofiasis
`Marketed tor cancer
`Failed as antiviral agent
`
`.
`
`PPAFI-alpha agonist
`
`in trials lor cardiovascular disease
`
`Failed asthma trial
`
`Ghrelln blocker
`
`in preclinical trials for obesity
`
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`URL for this article:
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