Eli Lilly shares slump as Alzheimer’s drug fails clinical trial

Eli Lilly said its Alzheimer's drug had failed in a large clinical trial, sending shares in the US drugmaker tumbling 14 per cent and dealing a big blow to the most widely accepted theory of what causes the disease.

Many analysts and investors had expected the medicine, solanezumab (sola), to delay the rate at which a patient loses their cognitive abilities, after previous studies appeared to show it could slow the progression of the disease by roughly a third in patients with a mild form of the condition.

However, the company said that while the results of the phase III trial “directionally favoured the drug, the magnitudes of difference were small” and, as such, it has no plans to seek regulatory approval for the medicine.

“The results of the solanezumab trial were not what we had hoped for and we are disappointed for the millions of people waiting for a potential disease-modifying treatment for Alzheimer’s disease,” said John Lechleiter, chief executive of Lilly.

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The results of the trial are a big blow for the so-called “amyloid hypothesis”, the foremost theory of what causes Alzheimer’s, which holds that the brain stops functioning because of a build-up of sticky plaque known as amyloid.

Hugely damaging

In an interview before the data were published, Dr Martin Farlow, a leading neurologist, said an outright failure would be hugely damaging to the theory and deter investors from backing other medicines designed to reduce amyloid.

“It’s a very well-organised test of the amyloid hypothesis with a convincing number of patients, so in that sense I think it would be received very badly,” said Dr Farlow, who was one of the researchers investigating sola for Lilly.

Several other companies are also testing drugs designed to clear amyloid from the brain in late-stage trials, including Biogen, Roche, Johnson & Johnson and Merck.

Shares in Lilly lost 14 per cent in premarket trading in New York, while Biogen fell 9 per cent.

Eli Lilly said the negative study outcome would result in a fourth-quarter charge of approximately $150 million or 9 cents per share.

The failure of the trial will overshadow the departure of Mr Lechleiter, who pressed ahead with the development of sola even after it flunked two earlier phase III studies.

He had hoped the drug would succeed in a clinical trial if it was only given to participants with mild forms of the disease.

– Copyright The Financial Times Limited 2016