Clinical Trials of PKC Beta Inhibitor Completed for the Treatment of Diabetic Retinopathy and Diabetic Macular Edema.

Business Editors, Health & Medical Writers

INDIANAPOLIS--(BUSINESS WIRE)--Dec. 16, 2002

Lilly to Conduct Further Studies based on Encouraging Initial

Data; EU Submission for Eye Indications Delayed

Eli Lilly and Company (NYSE:LLY) announced today that two clinical trials to explore the effect of ruboxistaurin mesylate - PKC Beta Inhibitor, also known as LY333531 - on delaying the progression of diabetic retinopathy and diabetic macular edema have been completed. Based on analysis of the data from these completed trials and discussions with external advisors, Lilly has decided to delay the European submission of ruboxistaurin for the eye indications that was planned for 2003. In both trials, the overall rate of disease progression was much lower than predicted in the placebo groups. This was a key factor in not meeting the studies' primary endpoints, a regulatory requirement for submission.

However, in the diabetic macular edema trial, a prospectively defined analysis of the study patients by the degree of their glucose control demonstrated that patients with a baseline Hemoglobin A1c of 11 percent or less experienced a statistically significant and clinically important reduction in the time to progression to vision-threatening macular edema. In addition, in the diabetic retinopathy trial, therapy with this investigational drug was associated with a decrease in the number of patients with sustained visual loss as determined by visual acuity assessment. Because of these positive results, Lilly is planning to start additional registration trials in 2003 to investigate ruboxistaurin for the treatment of diabetic retinopathy and diabetic macular edema. Importantly, no safety issues were discovered during these clinical trials that would preclude continued development.

"While we are disappointed with the delay in European submission of the eye indications, these new findings are very encouraging and consistent with the positive effect of ruboxistaurin that was observed in a previous Phase 2 diabetic peripheral neuropathy study," said August M. Watanabe, M.D., executive vice president science and technology. "Based on what we have learned, we continue to be committed to developing ruboxistaurin for the treatment of diabetic microvascular complications and to pursuit of a global submission of ruboxistaurin for the treatment of diabetic retinopathy, diabetic macular edema and diabetic peripheral neuropathy."

Results from the diabetic retinopathy and diabetic macular edema trials will be presented at a major scientific meeting in mid-2003. Lilly now plans its first European submission for ruboxistaurin to be for the treatment of symptoms of diabetic peripheral neuropathy in 2004, in addition to the originally planned 2004 U.S. submission for this indication, following the completion of the ongoing Phase 3 diabetic peripheral neuropathy clinical trials.

Lilly, a leading innovation-driven corporation, is developing a growing portfolio of best-in-class pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in Indianapolis, Ind., Lilly provides answers - through medicines and information - for some of the world's most urgent medical needs.

This press release contains forward-looking statements that reflect Lilly's current beliefs about the potential for PKC Beta Inhibitor in the treatment of diabetic retinopathy, diabetic macular edema and symptoms of diabetic peripheral neuropathy. However, as with any pharmaceutical under development, there are significant risks and uncertainties in the process of development and regulatory review. The product has not yet been proven safe and effective. There are no guarantees that future clinical trials will confirm the preliminary results referred to in this release or that the product will receive necessary regulatory approvals or prove to be commercially successful. There are no guarantees that regulatory filings will proceed on the current timetable. For additional information about the factors that affect Lilly's business, please see Exhibit 99 to the company's latest Form 10-Q, filed November 2002. The company undertakes no duty to update forward-looking statements.

Note to Editors: In reference to "Hemoglobin A1c", the "1c" should be subscript.