http://www.StockMarketFunding.com Eli Lilly & Co. (LLY) said it has halted the development of Alzheimer's disease treatment semagacestat as two late-stage studies showed the drug didn't slow the disease's progression and may have worsened patients' conditions.
Shares of the drug-making giant slid 2.16% to $34.80 premarket. As of Monday's close, the stock had risen 8.7% in the past year.
Lilly said the decision to halt the treatment's development is expected to result in a 3-cent to 4-cent charge in the third quarter. The company affirmed its full-year earnings guidance.
Lilly said preliminary results from two ongoing long-term Phase 3 studies showed semagacestat "did not slow disease progression and was associated with worsening of clinical measures of cognition and the ability to perform activities of daily living."
Major drug companies' pipelines are becoming more critical as patents on many current blockbuster drugs are set to expire the next several years, inviting generic competition and highlighting the need for new exclusive hit treatments.
"We are clearly disappointed by the results we are announcing today," said Chairman and Chief Executive John Lechleiter. "Pharmaceutical research always carries risk, as these results show."
The company noted that its decision to halt development of semagacestat doesn't affect ongoing clinical trials of its other Alzheimer's treatment, solanezumab.
Tuesday's news is the second recent bump in the road for Lilly, which last week said it lost a patent dispute over attention deficit hyperactivity disorder drug Strattera, opening the gates for a generic version to hit the market.
Last month, the company said its second-quarter earnings rose 16% as sales climbed.