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Is Lilly's Effient Sufficient?

I was wrong.

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I'd blogged a few times that I thought the FDA might have a problem with "Effient," Eli Lilly's proposed name for its bloodthinner, because it was too close to efficient and all the connotations that would have.

For example, when you do a Google search of just "Effient" only results for Effient come up.

But if you type in "effient drug" or "effient bloodthinner" Google comes back with "Did you mean 'efficient drug'?" or "Did you mean 'efficient bloodthinner'?"

Still, the name sailed through. Late last Friday, the agency announced it had finally approved the drug.

I say finally because Effient had been delayed for about a year-and-a-half. Even LLY had jumped the gun, promising in a medical journal ad last year that Effient was "Coming Soon."The company often countered that the application, if you printed it on paper, would stack nearly as high as the Empire State Building, so the agency had a lot of stuff to comb through.

Well, it's here now, but perhaps not in the potential blockbuster form that some analysts and investors thought it could be. That's because the FDA is putting a boxed warning (previously known as a "black box warning")about the risk of certain patients having their blood thinned so much that they might start to bleed. The market is reacting negatively. After popping on the news just before the closing bell on Friday, the shares are the biggest percentage loser in big pharma this morning. Meantime, as I write this, shares of Sanofi-Aventis and Bristol-MyersSquibb, which make the Effient competitor Plavix, are higher and essentially flat, respectively.

Healthy Horizons -- A Special Report
Healthy Horizons -- A Special Report

Les Funtleyder, the healthcare analyst at Miller Tabak, writes in a research note to clients this morning, "This will likely not be a major drug...." Deutsche Bank's pharma analyst Barbara Ryan has dropped her Effient sales forecasts by as much as $300 million a year. But David Moskowitz at Caris & Company believes "Lilly has a chance to become successful with this product as long as doctors are careful to avoid using the drug in patients at higher risk of bleeding."

Lilly is facing kind of a double whammy. It's staring down the loss of the patents on two of its biggest drugs, Zyprexa and Gemzar, and Plavix goes generic in a couple of years. That means a much cheaper, popular bloodthinner will be competing against Effient. JPMorgan's Chris Schott writes, "We continue to believe that the product (Effient) is not enough to offset Lilly's looming patent cliff...." And Seamus Fernandez at Leerink Swann echoes those comments. "We continue to believe that LLY's late-stage pipeline won't be enough to mitigate the (greater than) 70 percent of forecasted '10 sales losing patent exclusivity in '11-'16," Fernandez wrote in a note.

JPM worked on the ImClone side of the Lilly deal and wants to bank LLY. Deutsche Bank makes a market in LLY, owns at least one percent of the shares and has done and wants to do more investment banking for the company. Maybe there's some Lilly banking business to be had if the company sees things the way some of the analysts do...that it needs to buy some more stuff to put in its pipeline and portfolio. That, some on the Street might argue, would be an efficient use of cash.

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Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman