Eli Lilly and Co. halted testing on an experimental treatment for schizophrenia after the company determined the drug was unlikely to show a benefit in patients.
Development of pomaglumetad methionil was stopped after an analysis of a large-scale study found the drug appeared to be ineffective, the Indianapolis-based company said Wednesday in a prepared statement. The decision wasn’t based on safety, Lilly said.
Lilly also said Wednesday that pomaglumetad methionil didn’t show a benefit in a smaller study that looked at its benefits when combined with another treatment. Last month, the company announced the drug had failed in another large-scale study. Analysts had low sales expectations for the medicine, including ISI Group analyst Mark Schoenebaum, who, in July, estimated peak annual revenue of $250 million.
“I’m disappointed in what these results mean for patients with schizophrenia who still are searching for options to treat this terrible illness,” Jan Lundberg, president of Lilly’s research laboratories, said in the statement. “While there are many challenges in this complex field of research, neuroscience remains a core area of focus at Lilly.”
Lilly is in need of new treatments as the drugmaker braces for the expected loss of as much as $7 billion in sales to generic competition over the next five years. The company now has 11 drugs in the final stages of testing.
The decision to stop the phase III study of pomaglumetad methionil is expected to result in a third-quarter pretax charge of $25 million to $30 million, or 2 cents a share after tax, the company said. The treatment was in the final stages of testing required to get U.S. regulatory approval.
Lilly shares slipped 4 cents, to $44.70 each, Wednesday in the opening minutes of trading.