Eli Lilly and Co (NYSE:LLY) shares were set to open more than 10 percent below Friday’s close on Monday morning, October 12, after the firm revealed that it would stop the making of evacetrapib. The drug, which targets cholesterol, was seen as a major hope for future earnings at the firm, but failure to perform in trials has put an end to its life.
A surprise statement from Eli Lilly on Monday morning said that the drug was not likely to reduce deaths from disorders linked with high cholesterol. The move puts an end to one of the major contenders in Eli Lilly’s pipeline. It also reduces Wall Street’s growth outlook on the firm, and puts much more pressure on the future of its other key research drugs.
Eli Lill & Co (NYSE:LLY) reveals real failure
This morning, before the market on Wall Street had a chance to open, Eli Lilly (NYSE:LLY) told the world that its big hope to cure cholesterol, and return cash to shareholders, was dead. Data that was reviewed by the firm lead management to believe that there was a low change of it meeting its Phase III trial goals.
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David Ricks Senior VP at eli Lilly and the man in charge of the firm’s bio-med segment said “We’re obviously disappointed in this outcome, as we hoped that evacetrapib would offer an advance in treatment for people with high-risk cardiovascular disease.” “We remain confident in our pipeline as we prepare for launches in other therapeutic areas with significant unmet needs,” he continued.
That pipeline includes drugs like solanezumab, which is hoped to be effective against Alzheimer’s disease.
Eli Lilly loses lottery
Betting on firms that make and sell meds is a hard game to play. Most traders don’t know much about the ins and outs of clinical trials, or of healthcare as a whole, and the value of stock in firms involved in the market rests weightily on the results from such tests.
What happened to shares in Eli Lilly (NYSE:LLY) this morning isn’t all that uncommon in the world of medical research. Firms in the space are hard to invest in for all but the most well-adjusted traders.
In the last year shares in Eli Lilly have gained strongly despite a lull in the growth of the wider market. Since this time last year shares in the big pharma firm have gained more than 23 percent. In the same period the S&P 500 has gained just over 5 percent.
The next big thing in cholesterol meds isn’t likely to come from Eli Lilly given the closure of the program to put evacetrapib on shelves. The drug is designed stop cholesterol ester transfer protein. The drug class showed a huge amount of promise in recent years, but entry after entry from major firm after major firm has fallen.
The exit of Eli Lilly from the potential market means that Merck is now the only major healthcare firm working on a way to stop cholesterol through a CETP inhibitor.