Eli Lilly & Co. (LLY) AD Portfolio Uncertain Following Sola Failure - Leerink

November 23, 2016 7:48 AM EST
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Leerink Partners analyst Seamus Fernandez weighed in on Eli Lilly & Co. (NYSE: LLY) after sola failed, saying this makes the future of the company's AD portfolio uncertain.

Fernandez commeted, "This morning LLY announced that its EXPEDITION 3 trial of solanezumab (sola) did NOT meet its primary endpoint of ADAS-cog14, a measure of cognition; secondary endpoints, while trending in the right direction, also had only small magnitude of benefits. We were disappointed, but not surprised by the result. In our forecast, we attributed ~30% probability of success for the trial with ~$1.5B risk-adjusted peak sales, which contributed ~$10-12/shr to our DCF estimate. This is the 3rd Phase 3 failure of LLY's solanezumab. Despite moving earlier into the disease progression (mild patients) and using biomarker to select patients (beta amyloid PET imaging), the treatment effect still proved to be not sufficient to result in a significant slowing of cognitive decline. This result will no doubt cast a shadow over LLY's Alzheimer's Disease (AD) pipeline portfolio, which is heavily based on the beta amyloid hypothesis. Other competitors' programs based on this hypothesis will probably continue, but this will likely have negative read-through on these results in the short term."

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