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Why Eli Lilly Stock Is Sinking Today

By Keith Speights - Mar 15, 2021 at 11:22AM

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Investors didn't like the company's mixed results from a clinical study of its experimental Alzheimer's disease drug.

What happened

Shares of Eli Lilly and Company ( LLY -2.67% ) were sinking 8.7% as of 10:42 a.m. EDT on Monday. The big drop came after the drugmaker presented data on Saturday from a phase 2 study of donanemab in treating Alzheimer's disease. Investors were disappointed by Lilly's results.

So what

There was good news from Lilly's study. The company reported that donanemab met the primary endpoint of slowing decline on the integrated Alzheimer's Disease Rating Scale (iADRS) compared to placebo. The iADRS is a composite scale that measures cognition and daily function with Alzheimer's disease patients. Lilly said patients receiving donanemab had a 32% reduction in iADRS score compared to patients on placebo.

Clipboard with Alzheimer's Disease printed at the top of a form next to X-rays

Image source: Getty Images.

So why weren't investors impressed? Donanemab didn't meet a secondary endpoint of decline in another more widely used measurement for Alzheimer's disease patients: the Clinical Dementia Rating Scale–Sum of Boxes (CDR-SB). 

Some probably couldn't help but recall that Lilly's solanezumab also performed well with the iADRS measure but didn't do so with the CDR-SB measure. Solanezumab went on to flop in late-stage testing. 

Still, Lilly thinks donanemab could be a success. Daniel Skovronsky, chief scientific officer and president of Lilly Research Laboratories, said: "This is the first late-stage study in Alzheimer's disease to meet its primary endpoint at the primary analysis. Donanemab has the potential to become a very important treatment for Alzheimer's disease."

Now what

Lilly plans to complete enrollment in a second pivotal study of donanemab in the second half of 2021. The big pharmaceutical stock will probably need other catalysts to rebound from today's sell-off, though: The first results from  this second study aren't expected until the first half of 2023.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Eli Lilly and Company Stock Quote
Eli Lilly and Company
LLY
$248.04 (-2.67%) $-6.79

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