New York – Pharmaceutical company Eli Lilly and Co., (NYSE: LLY) saw its shares plunged down on Monday after the drug maker announced it is holding up development for Evacetrapib, a drug intended for patients with high risks of heart disease.
Eli-Lilly’s losses cost the company about $7 billion in market capitalization turning this in Eli Lilly’s worst day since the 2008 financial crisis.
The company informed the decision was taken upon recommendations of the independent data monitoring committee after drug trials in about 12,000 patients failed to show enough prove on the drug’s efficiency. The decision terminates with Evacetrapib’s Phase 3 trial and concludes its inability to treat high-risk heart disease.
“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,” David Ricks, president of Lilly Bio-Medicines, said in a statement released by the company.
Previous research had raised hopes for the medical community and investors on the potential of Evacetrapib to be a big success in preventing heart attacks, strokes and other cardiovascular problems. Including a study by the American Heart Association in 2012 showed that the drug, part of the CEPT family, was able to enhance good cholesterol levels and diminish the bad kind.
Still, Eli Lilly tries to reassure Wall Street’s confidence in the company’s future by establishing confidence in the “strong pipeline” of other drugs in development, and the decision to discontinue the elaboration of Evacetrapib is expected to result in a fourth-quarter charge to research and development expense of up to $90 million pre-tax.
For other players in the pharmaceutical game, Eli Lilly’s announcement came as perfect news. Especially for those like rival drug maker Merck (MRK) which is working on its own CEPT cholesterol drug known as anacetrapib currently in testing. Also Regeneron Pharmaceuticals (REGN) which stocks jumped 4% on Monday, making it the best performer on the S&P 500 received FDA approval in late July for a cholesterol-lowering treatment it developed with Sanofi called Praluent.
Source: CNN Money