It was the most closely watched experimental drug from Eli Lilly and Co. in years, a potential game-changer for treating the ravages of Alzheimer’s disease.
But when the company announced last month that solanezumab had failed in late-stage clinical trials, the news sent a shiver from the Indianapolis campus to Wall Street.
Lilly shares tumbled 15 percent on the setback, and within a week Lilly was making plans to terminate hundreds of jobs connected to the aborted launch of the drug, as well as several other drugs that were about to lose patent protection.
It was a stinging setback for Lilly, which has spent more than $3 billion over the past 27 years trying to find a treatment for a disease that is the sixth-leading cause of death in the United States.
There’s little doubt solanezumab would have provided Lilly a huge shot in the arm. Alzheimer’s disease robs the minds of more than 5 million Americans and 40 million people worldwide. More than 100 compounds have failed to show they can slow its debilitating effects. Goldman Sachs had predicted annual sales of $2.6 billion for solanezumab by 2025, if it were successful.
The setback added up to a tough beginning for David Ricks, 49, who will take over as Lilly’s CEO Jan. 1, succeeding John Lechleiter, who is retiring after nine years at the helm. Among Ricks’ first jobs: calming upset scientists, patients and caregivers devastated by the solanezumab news.
“It’s heartbreaking,” Ricks said. “People come here every day to make a difference.”
Ricks’ next job is to reinforce that Lilly will continue to research treatments for Alzheimer’s disease and that the company’s pipeline of drugs, from arthritis to cancer, holds enough promise for investors to continue to support the stock. Lilly executives said they still expect to grow average annual revenue at least 5 percent from 2015 to 2020.
Still, several analysts lowered their price target and stock recommendations, sounding as if they wanted the company to prove itself with a string of successful launches.
Lilly said it hasn’t decided what next steps, if any, to take with solanezumab.•