Lilly Partial Win Over FDA’s Biologic Classification

A federal judge has handed Eli Lilly a partial win in a lawsuit challenging FDA’s refusal to classify retatrutide — the company’s investigational obesity therapy — as a biological product. The U.S. District Court for the Southern District of Indiana ruled that while the agency acted lawfully in concluding that retatrutide does not meet the regulatory definition of a “protein,” its separate determination that the product is not analogous to a protein was found to be arbitrary and capricious.

Retatrutide is an experimental, injectable medication for treating obesity, Type 2 diabetes, and fatty liver disease. It is described as a triple agonist, as it mimics three key hormones that regulate appetite, metabolism, and blood sugar — GLP-1, GIP, and glucagon. Recent Phase 2 clinical data reported by Lilly showed that the therapy was associated with significant weight reduction. Participants on the highest dose (12 mg) achieved a mean weight loss of 24.2%, compared to 2.1% with a placebo.

The court decision granted partial summary judgment to both parties, upholding FDA’s core interpretation of what constitutes a “protein” but ordering the agency to revisit its reasoning on the “analogous product” issue. At issue was how the agency interprets its own rule defining a protein for purposes of determining whether a product falls under the Public Health Service Act requiring a BLA, or under the Federal Food, Drug, and Cosmetic Act as a traditional drug requiring an NDA.

Lilly had previously asked FDA to designate retatrutide, a multi-receptor peptide therapy, as a biological product, arguing that it qualifies as a protein under (XXXX DELETE XXX)FDA’s definition: “any alpha amino acid polymer with a specific, defined sequence that is greater than 40 amino acids in size.” The company maintained that (XXX DELETE XX)FDA should count all amino acids, including non-alpha amino acids, in making that determination.

The agency disagreed, concluding that only alpha amino acids count toward the 40-amino-acid threshold. Based on that interpretation, the agency classified retatrutide as a drug, not a biologic — a distinction that affects both regulatory pathways and market exclusivity under the Biologics Price Competition and Innovation Act.

In the decision, judge Tanya Walton Pratt found that FDA’s interpretation of “protein” was consistent with the regulation’s text and scientific context, ruling that the phrase “alpha amino acid polymer” should be read as a whole rather than piecemeal. The court cited both scientific definitions and the regulatory history in concluding that the agency’s rule — requiring more than 40 alpha amino acids — was reasonable.

“Even if Congress intended to include non-naturally occurring proteins in the definition of ‘biological product,’ it does not foreclose the FDA’s interpretation requiring proteins to contain at least forty alpha amino acids,” the court said.

However, the court also found that FDA acted arbitrarily when it rejected Lilly’s argument that retatrutide should at least be considered analogous to a protein. Pratt noted that the agency had taken a different position in prior cases without offering a sufficient explanation for changing course. Because FDA did not provide a “reasoned explanation” for this shift, the court ordered the agency to reconsider its decision on whether retatrutide may qualify as an analogous biological product.