Following news that its Alzheimer's drug has failed final stage trials, Eli Lilly stock is crashing this morning to 2 year lows. The 'safe haven', 'paid-to-wait' stock has tumbled almost 15% - erasing over 6 years of dividends, and sparking contagious selling across Biotech stocks.
As The FT reports, many analysts and investors had been expecting the medicine, Solanezumab, to show efficacy in patients suffering from mild dementia due to the disease, after previous trials showed it slowed the disease by roughly a third in early-stage patients, reports David Crow in New York.
However, the company said that while many of the results “directionally favoured the drug, the magnitudes of differences were small” and, as such, it has no plans to seek regulatory approval.
“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 officer, Lilly.
He added: “We will evaluate the impact of these results on the development plans for Solanezumab and our other Alzheimer’s pipeline assets.”
And thus the disappointment.
So much for that 2.68% dividend yield.
And other Biotech stocks are taking it on the chin, such as Biogen, which is also running trials on its own Alzheimer drug...