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Eli Lilly Discontinues Evacetrapib; Investors Move Bets To Alternatives

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Eli Lilly Discontinues Evacetrapib; Investors Move Bets To Alternatives

Eli Lilly and Co (NYSE: LLY) shares are plunging nearly 8.0 percent in early trading on Monday after the company announced that it is discontinuing development of cardiovascular disease treatment drug evacetrapib because of disappointing efficacy. Here’s a look at what shareholders can expect and which companies benefit most from the decision.

What Now?

According to the company, Eli Lilly shareholders should expect a $90 million Q4 charge amounting to about five cents per share as a result of the decision to drop evacetrapib. The decision came after an independent data monitoring committee reviewed late-stage trial data on the drug and found insufficient efficacy and low probability that the study would hit its primary target.

Company Disappointed

Company insiders are understandably disappointed in the results, but believe that the decision was the prudent one to make given the circumstances. “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,” Lilly Bio-Medicines president David Ricks said of the decision.

Winners

Eli Lilly shareholders are likely disappointed by the news and the drop in share price, but can take comfort in the fact that the stock has still outperformed the S&P 500 by a wide margin year-to-date.

Shares of Lilly competitors Esperion Therapeutics Inc (NASDAQ: ESPR), Regeneron Pharmaceuticals Inc (NASDAQ: REGN) and Amgen Inc (NASDAQ: AMGN) are all trading higher on Monday morning on the news that they will not be facing another competitor in the space in coming years.

Disclosure: the author holds no position in the stocks mentioned.

Posted-In: Biotech pharmaBiotech Top Stories Movers General Best of Benzinga

 

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