Company Update (NYSE:LLY): Here’s Why Eli Lilly and Co Shares Tumbled 12% Today


This morning Eli Lilly and Co (NYSE:LLY) announced that its Phase 3 EXPEDITION-3 trial evaluating solanezumab in Alzheimer’s failed. LLY noted that while secondary endpoints directionally favored sola, the magnitude of benefit was small. Based on these results, the company not surprisingly will not file for approval. Many investors had expected this trial to work so today’s news will likely be viewed as a negative surprise for most drug investors.

Eli Lilly shares reacted to the news, falling nearly 12% to $66.80 in early trading session Wednesday.

“The results of the solanezumab EXPEDITION3 trial were not what we had hoped for and we are disappointed for the millions of people waiting for a potential disease-modifying treatment for Alzheimer’s disease,” said John C. Lechleiter, Ph.D., chairman, president and chief executive officer, Lilly. “We will evaluate the impact of these results on the development plans for solanezumab and our other Alzheimer’s pipeline assets.”

“Lilly is grateful for the dedication of the patients, their families, and the clinical investigators who participated in this study,” said Jan Lundberg, Ph.D., executive vice president of science and technology and president of Lilly Research Laboratories. “Lilly remains committed to Alzheimer’s research as we have been for nearly 30 years, and our portfolio includes many other promising approaches.”

“Lilly has strong growth prospects without solanezumab,” said David A. Ricks, Lilly’s incoming chief executive officer and president of Lilly Bio-Medicines. “Driven by new product launches, we continue to expect to grow average annual revenue by at least 5 percent between 2015 and 2020. Over that time frame, we also expect to increase our margins and provide annual dividend increases to our shareholders.”

On the ratings front, Eli Lilly has been the subject of a number of recent research reports. In a report released today, J.P. Morgan analyst Chris Schott maintained a Buy rating on LLY, with a price target of $85, which represents a potential upside of 32% from where the stock is currently trading. Separately, on the same day, Jefferies’ Jeffrey Holford maintained a Buy rating on the stock and has a price target of $100.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Chris Schott and Jeffrey Holford have a yearly average loss of 3.5% and a return of 3.4% respectively. Schott has a success rate of 36% and is ranked #3665 out of 4240 analysts, while Holford has a success rate of 46% and is ranked #1100.

Eli Lilly & Co. discovers, develops, manufactures and sells pharmaceutical products. The company operates through the following business segments: Human Pharmaceutical Products and Animal Health. The Human Pharmaceutical products segment includes the discovery, development, manufacturing, marketing, and sales of human pharmaceutical products worldwide in the following therapeutic areas: neuroscience, endocrinology, oncology, cardiovascular, and other. The Animal health segment operating through the Elanco Animal Health division, develops, manufactures, and markets products for both food and companion animals. The Animal health products include Rumensin, Tylan, Posilac, Paylean and other products for livestock and poultry, as well as Trifexis, Comfortis, and other products for companion animals. The Other Pharmaceuticals products include anti-infectives, primarily Vancocin and Ceclor, and other miscellaneous pharmaceutical products and services. Its products are distributed through wholesalers that serve pharmacies, physicians and other health care professionals, and hospitals.


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