Drug making giant Eli Lilly and Co (NYSE:LLY) saw its shares plunge up to 15% in early trading Wednesday, after news broke that its key Alzheimer’s treatment failed its latest clinical trial.
The Indianapolis-based company said that solanezumab did not meet the primary endpoint in the EXPEDITION3 trial. The drug was being tested for its effectiveness in the treatment of mild dementia due to Alzheimer’s disease.
Lilly noted patients treated with solanezumab “did not experience a statistically significant slowing in cognitive decline compared to patients treated with placebo (p=.095), as measured by the ADAS-Cog14 (Alzheimer’s Disease Assessment Scale-Cognitive subscale).”
While solanezumab showed some promise in the study results, the size of the drug’s effects were small. LLY also announced that there were no new safety signals found in the study.
As a result of the failed trial, the company will not attempt to receive regulatory approval for the drug for the treatment of mild dementia due to Alzheimer’s disease. The debacle is expected to a cost LLY a fourth quarter pre-tax charge of about $150 million, or around $0.09 per share on an after-tax basis.
Next month, December 15, Lilly will update its 2016 financial guidance and announce its 2017 financial forecast. Investors will get a good idea of just how badly this drug failure will impact results then.
Eli Lilly shares fell $10.79 (-14.20%) to $65.20 in premarket trading Wednesday. Prior to today’s news, LLY had already plunged -9.81% year-to-date, versus an +8.19% rise in the benchmark S&P 500 index during the same period.