Analyst Downgrades Eli Lilly
Ahead of the Bell: Analyst Downgrades Eli Lilly
From Associated Press (July 30, 2012)
Jefferies & Co. expects Eli Lilly’s Alzheimer’s treatment to fail in late-stage testing and says it has only a 25 percent chance of being effective in a niche population.
Analyst Jeffrey Holford lowered his rating on the Indianapolis drug maker’s stock to "underperform" from "hold" and dropped his price target to $35 from $37.
"We believe that a potent mix of income fund and catalyst-driven investors has driven valuation to a point where it has little fundamental support, other than dividend yield," Holford wrote in research note Monday.
Eli Lilly and Co. is expected to release some results from late-stage testing of the drug solanezumab in this quarter. Last week, Pfizer Inc. and Johnson & Johnson said their potential Alzheimer’s treatment, labeled bapineuzumab, didn’t slow mental or functional decline in patients with mild or moderate Alzheimer’s disease in one study.
The study included patients who carry a gene that gives people a higher risk of developing the memory-robbing disorder. The companies are continuing other studies of the drug.
Holford sees a "direct read-through" from the bapineuzumab study to the Lilly drug, and he was not hopeful for a variety of reasons for positive results from solanezumab’s late-stage testing.
There’s no known cure for Alzheimer’s disease. Current medicines temporarily ease symptoms such as memory loss, confusion and agitation. But they do nothing to slow, stop or reverse mental decline.
Company shares slipped 42 cents to $43.95.
Posted: July 2012