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LLY

Eli Lilly

$67.13

-8.86 (-11.66%)

, BIIB

Biogen

$318.11

-0.21 (-0.07%)

10:44
11/23/16
11/23
10:44
11/23/16
10:44

Analysts hold out hope for Biogen drug after Lilly's Alzheimer trial fails

Shares of Eli Lilly (LLY) are plunging after the drugmaker announced that a Phase 3 study showed that solanezumab failed to slow loss of cognitive ability in patients with mild Alzheimer's disease. The news is also dragging down competitor Biogen (BIIB), which is developing its own Alzheimer's drug. FAILED CLINICAL TRIAL: Eli Lilly announced that its solanezumab drug did not meet the primary endpoint in the EXPEDITION3 clinical trial, a phase 3 study in people with mild dementia due to Alzheimer's disease. Patients treated with the drug did not experience a statistically significant slowing in cognitive decline compared to patients treated with placebo. Lilly will not pursue U.S. regulatory submissions for solanezumab for the treatment of mild dementia due to Alzheimer's disease. During an interview on CNBC, the company's CEO John Lechleiter said Eli Lilly is disappointed with the results, but remains committed to Alzheimer's. SELLOFF AN ATTRACTIVE OPPORTUNITY: While viewing the clinical results as a "disappointing outcome," JPMorgan analyst Chris Schott told investors that Eli Lilly has a diverse range of new product and pipeline opportunities that support 5% sales growth and mid-teens earnings growth. Moreover, he sees the selloff as an "attractive opportunity." He reiterates an Overweight rating on the stock, but lowered his price target on the shares to $85 from $95. His peer at Jefferies also remains bullish on Eli Lilly, reiterating a Buy rating and $100 price target on the shares. Analyst Jeffrey Holford noted that the company's management still expects to grow revenue between 2015 and 2020, while expanding margins. Further, the company is still pursuing the Alzheimer's indication through a number of other programs, Holford told investors in a research note of his own. BIOGEN DRUG CAN STILL WORK: Following the failure of Eli Lilly's solanezumab, Citi analyst Robyn Karnauska told investors that she sees four reasons why Biogen's Alzheimer's drug aducanumab can still work, namely the difference in mechanism of action, efficacy in an end-point-dependent manner, patient population and endpoints. Piper Jaffray analyst Joshua Schimmer voiced a similar opinion, arguing that the "amyloid hypothesis" is not dead. The amyloid cascade hypothesis to which he refers is the theory that the deposition of the amyloid-beta peptide in the brain is a central event in Alzheimer's disease pathology. The analyst pointed out that he sees Biogen and Eisai's aducanumab study as the most potent approach for amyloid lowering, adding that he was skeptical whether solanezumab's effect was adequate. The amyloid hypothesis for Alzheimer's may have taken another step back, but will not be fully put to the test until Biogen reports Phase 3 results, he contended. Additionally, Schimmer believes that today's selloff in Biogen's shares creates "some breathing room." He reiterated an Overweight rating and $335 price target on Biogen's shares. PRICE ACTION: In morning trading, shares of Eli Lilly have dropped 12% to $66.88, while Biogen's stock has slipped about 5% to $302.37 per share.

LLY

Eli Lilly

$67.13

-8.86 (-11.66%)

BIIB

Biogen

$318.11

-0.21 (-0.07%)

  • 29

    Nov

  • 04

    Dec

LLY Eli Lilly
$67.13

-8.86 (-11.66%)

11/23/16
JPMS
11/23/16
NO CHANGE
Target $85
JPMS
Overweight
JPMorgan sees 'attractive opportunity' amid Eli Lilly selloff
JPMorgan analyst Chris Schott lowered his price target for Eli Lilly to $85 from $95 after the phase III trial of solanezumab missed on both primary and secondary endpoints. Beyond solanezumab, Lilly has a diverse range of new product opportunities that support 5% sales and mid-teens earnings growth, Schott tells investors in a research note. With the shares down 13% to $65.81 in pre-market trading, the analyst sees an "attractive opportunity." He keeps an Overweight rating on Lilly.
11/23/16
JEFF
11/23/16
NO CHANGE
Target $100
JEFF
Buy
Eli Lilly still expects to grow revenue, says Jefferies
Jefferies analyst Jeffrey Holford says that while the solanezumab Phase III trial failure is disappointing, Eli Lilly management expects to grow revenue between 2015 and 2020 while expanding margins. Further, the company is still pursuing the Alzheimer's indication though a number of other programs, Holford tells investors in a research note. The analyst previously estimated a negative solanezumab trial outcome could see the stock down $12. Shares of Lilly are currently down $10.19 to $65.80 in pre-market trading. Holford keeps a Buy rating on Lilly with a $100 price target.
11/23/16
SBSH
11/23/16
NO CHANGE
Target $305
SBSH
Buy
Citi sees four reasons why Biogen Alzheimer's drug can still work
Citi analyst Robyn Karnauska sees four reasons why Biogen's (BIIB) Alzheimer's drug aducanumab can still work following the failure of Eli Lilly's (LLY) solanezumab. The analyst lists difference in mechanism of action, efficacy in an end-point-dependent manner, patient population and endpoints as why she thinks Biogen's drug can have a different outcome than Lilly's. The analyst has a Neutral rating on Biogen with a $305 price target.
11/23/16
JEFF
11/23/16
NO CHANGE
Target $310
JEFF
Buy
Biogen selloff may be an overreaction, says Jefferies
Jefferies analyst Brian Abrahams believes selloff in shares of Biogen (BIIB) following Eli Lilly's (LLY) Alzheimer's failure may be an overreaction. Signals of activity seen for Lilly's sola "do maintain some possibility" that Biogen's aducanumab could "ultimately make it over the line," Abrahams tells investors in a research note. He keeps a Hold rating on Biogen with a $310 price target, however, viewing the risk/reward as balanced.
BIIB Biogen
$318.11

-0.21 (-0.07%)

11/23/16
PIPR
11/23/16
NO CHANGE
PIPR
Overweight
Piper's Schimmer proclaims amyloid hypothesis is not dead
Piper Jaffray analyst Joshua Schimmer says the failure of Eli Lilly's (LLY) solanezumab is not the final nail in the amyloid hypothesis coffin. Biogen (BIIB) and Eisai's aducanimab study is the most potent approach for amyloid lowering, Schimmer tells investors in a research note. He points out that he was skeptical whether solanezumab's effect was adequate. "Our view of Alzheimer's for amyloid is informed not so much by the extremely sloppy science in that disease, but by consistent cause/effect signals across other amyloidosis," Schimmer writes. He believes today's selloff in shares of Biogen "creates some breathing room." The analyst recommends looking to build a position in Biogen after the stock settles down. Schimmer reiterates an Overweight rating on the shares with a $335 price target. The stock is down 8%, or $24.41, to $293.70 in pre-market trading.
11/23/16
MSCO
11/23/16
NO CHANGE
MSCO
Overweight
Morgan Stanley expects big reversal today in Biogen shares
Morgan Stanley Matthew Harrison expects shares of Biogen (BIIB) to end the trading day flat or slightly higher. The stock is currently down $26.61, or 8%, to $291.50 in pre-market trading. With Biogen's aducanumab more potent than Eli Lilly's solanezumab, the Alzheimer's drug still has potential for success, Harrison tells investors in a research note. He points out that Lilly management noted that "the study results, including many secondary clinical endpoints, directionally favored solanezumab." Harrison sees hope in the amyloid hypothesis. The analyst has an Overweight rating on Biogen.

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HYG

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