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The company’s promising Alzheimer’s treatment, watched eagerly by many, has failed in a late stage clinical trial.

“Alzheimer’s disease will be defeated. I’m convinced of that”: so declared Dr. John C. Lechleiter, CEO of Eli Lilly (NYSE:LLY) in a video address published today. It’s an optimistic message in the face of devastating news—the company’s promising Alzheimer’s treatment, watched eagerly by many, has failed in a late stage clinical trial. That setback caused Lilly to lose approximately 12 percent in morning trade. But it’s also a blow to the pharmaceutical industry at large, as companies developing similar drugs have also seen their stock plummet.
Solanezumab, an injectable antibody medication, was designed to attack a plaque-forming protein believed to be at the root of Alzheimer’s disease. It was one of several “anti-amyloid” drugs the industry is at work on, all of which target that plaque-forming protein.
On November 23, 2016, Lilly announced that solanezumab did not meet its primary endpoint in the EXPEDITION3 clinical study, a phase III trial. The failure will result in a $150 million charge on Lilly’s fourth quarter report, or around $0.09 per share.


But the news’ impact doesn’t stop there. This is the shot heard around the market, as investors seem to have taken solanezumab’s failure as a death knell for all like drugs.
Biogen (NASDAQ:BIIB) and Roche (OTC:RHHBY), for example, are also developing anti-amyloid Alzheimer’s treatments. Both companies have seen downward stock movement today: Biogen dropped approximately 15 points in morning trade and Roche saw its stock fall around one percent.
Still, experts say solanezumab’s failure—while disappointing—does not mean the method itself is unsound. “This is probably not the end for amyloid approaches,” Elizabeth Coulthard, a dementia specialist, told Reuters. As a matter of fact, the EXPEDITION3 trial did show a slight directional trend that favored solanezumab.
Another class of experimental Alzheimer’s drugs—known as BACE inhibitors—may gain traction following today’s disappointing news. BACE inhibitors are delivered orally and work to block beta amyloid production in a different way than drugs like solanezumab do.
Lilly has a BACE inhibitor in development alongside AstraZeneca (NYSE:AZN), although Merck (NYSE:MRK) leads the market here: their product candidate, verubecestat, is currently in phase III trials. Initial results from those are expected in 2017.

Don’t forget to follow us @INN_LifeScience for real-time news updates.
Securities Disclosure: I, Chelsea Pratt, hold no direct investment interest in any company mentioned in this article.
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