PropThink: Hope For LLY's Alzheimer's Drug Remains Alive; Stock Will Reflect Optimism
(Thomson Reuters ONE) -
Eli Lilly & Co. (NYSE:LLY) announced this morning that its potential treatment
to slow the onset of Alzheimer's Disease, solanezumab, showed favorable effects
in its Phase III clinical program. Shares of LLY were off initially in pre-
market trading on the headline that the drug missed its primary endpoint for
improving cognition and function in each of its two Phase III trials in patients
with mild to moderate Alzheimer's disease. However, when the company pooled the
data, results showed that there actually was a statistically significant
improvement in the reduction of "cognitive decline" across both trials. While
this was a secondary endpoint, combining the data from both trials was a "pre-
specified analysis" meaning that it is a more legitimate cut of the data. Lilly
had been pro-active in guiding investors that it would not reveal data from each
trial separately, but that the company would only release results when the
combined data became available. In addition, a pre-specified subgroup analysis
of the pooled data showed that mild Alzheimer's patients experienced a
statistically significant slowing of cognitive decline, while moderate
Alzheimer's disease patients did not. LLy stated on a conference call this
morning that the reason the individual trials did not show the significance was
that the number of mild patients in each trial was too small to drive the
results, yet pooled data sufficiently increased presence. These results indicate
that LLY will gear any future trials to enroll mild patients to verify this
effect, and that if the effect is validated, the drug could be used in earlier-
stage patients.
LLY stated this morning that it will meet with global drug regulators to discuss
the results and left open the possibility that they could file for approval on
these results. The company plans to release full trial results at an Alzheimer's
medical meeting in October. LLY avoided a question on consistency of results in
mild patients between the two studies. This could be a risk for the stock when
trial results are revealed in October. Nevertheless, expectations were for a
complete Phase III failure of solanezumab, and enthusiasm that LLY may have a
revolutionary treatment could fuel continued strength in LLY into the October
results.
LLY's dividend of >4% remains a key support for the stock, and any further good
news from the Alzheimer's program is likely upside to the shares. While most
Wall Street analysts had no revenue expectations for solanezumab in their
models, some could actually introduce risk-adjusted forecasts given the
relatively good news today. Expect LLY to hold onto early gains and trade well
into October results.
To see this article at PropThink.com, click here.
Or, click here to see our previous story demonstrating the strengths of Eli
Lilly and Baxter International (NYSE:BAX) as risk-mitigated Alzheimer's plays.
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Source: PropThink via Thomson Reuters ONE
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Datum: 24.08.2012 - 16:29 Uhr
Sprache: Deutsch
News-ID 177493
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