Eli Lilly & Co. (LLY) saw shares drop on heavy volume after news that their experimental new drug ramucirumab failed to show a statistically significant improvement over placebos while treating breast cancer. The company’s stock gapped down over 2 percent at open and was off over 3.5 percent by afternoon trading.
Mixed results in two Phase III studies
There were two Phase III studies testing the effectiveness of ramucirumab in combination with certain other drugs, one for advanced-stage gastric cancer and another for breast cancer. The drug, a monoclonal antibody being developed for the treatment of solid tumors, failed to return the results Lilly was hoping for when treating breast cancer, but it did show significant results in the trials for gastric cancer.
"We are disappointed that this breast cancer trial did not meet its primary endpoint. However, now with two positive gastric cancer trials, Lilly remains confident in the overall ramucirumab development program," said Lilly Oncology’s vice president of product development and medical affairs Richard Gaynor, M.D. in the company's press release.
The positive results for the RAINBOW trial treating patients with gastric cancer garnered optimism from Lilly, though.
"We are excited to see a second positive Phase III trial of ramucirumab in gastric cancer demonstrating an improvement in both overall survival and progression-free survival, as stomach cancer is a difficult-to-treat disease that remains a major health problem worldwide and the prognosis for patients diagnosed with advanced gastric cancer is poor," said Gaynor.
Concern for the future?
Bad news from the ramucirumab trials represented real concern for some Eli Lilly investors. The company is currently counting on ramucirumab as well as experimental drugs for treating Alzheimer’s and diabetes as revenue is projected to decline some 20 percent in 2014 when generic competition should hurt sales for antidepressant Cymbalta and osteoporosis drug Evista. Eli’s suffered a string of setbacks for drugs it has in development.
“This is yet another high-profile phase-3 failure for Eli Lilly that we believe could trigger investor calls for a shift in strategy,” said BMO Capital Market analyst Alex Arfaei in a note to clients. “We remain cautious.”
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