Wall Street oddsmakers betting heavily against Lilly's solanezumab

Eli Lilly's ($LLY) R&D wing gets no respect. After registering a series of key late-stage failures, the pharma giant is just days or weeks from announcing late-stage data on its Alzheimer's drug solanezumab. And analysts have been competing to offer ever higher odds of failure.

Today it's Jefferies' Jeffrey Holford's turn. Holford now expects an outright failure on key endpoints for the general population of Alzheimer's patients with a mild to moderate case of the memory-wasting disease. And he gives the treatment only a marginal, 25% shot of success for a niche population group.

It gets worse.

In the event of a failure, Holford expects to see Lilly's shares tank, dropping 20%. And he doesn't see anything else in the late-stage pipeline with the same kind of potential. As for Lilly's recent forecast of rising revenue after Lilly weathers patent losses in the next two years, Holford noted that the move was a "pre-emptive strike ahead of the pivotal read-out for solanezumab in Alzheimer's to support consensus estimates in case it fails."

The increasingly bleak forecasts for Lilly haven't been helped by the recent announcement that bapineuzumab, a late-stage Alzheimer's treatment in the hands of Johnson & Johnson ($JNJ) and Pfizer ($PFE), failed the first of four Phase III studies. But both J&J and Pfizer are in a better position to weather a blockbuster clinical debacle than Eli Lilly, where CEO John Lechleiter has insisted for years that the pharma company will avoid the M&A route to big growth. A Phase III disaster for solanezumab would likely raise serious questions about Lechleiter's job security at the pharma giant, much as David Brennan experienced at AstraZeneca.

- here's the story from the AP
- get the Reuters report

Related Articles:
Pfizer, J&J Alzheimer's drug bapineuzumab flunks out in big PhIII
Gammagard demonstrates signs of efficacy in PhII Alzheimer's study
Lilly chief resolves to stick with high-risk pipeline strategy
Lilly chief skeptical of buyouts--and not just megadeals

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