Experts React To Concerning Alzheimer's News From Eli Lilly

Eli Lilly and Co (NYSE: LLY) fell steeply Wednesday after it announced that its Alzheimer's disease treatment candidate solanezumab didn't meet the primary endpoint in a late-stage clinical trial dubbed EXPEDITION3. In a sympathy move, Biogen Inc (NASDAQ: BIIB) also traded notably lower. Is the knee-jerk reaction to the development a hasty move or a judicious decision?

Voices From The Street

Experts explore the implications of Eli Lilly's trial results:

• Raymond James said it would be buyers of Biogen on weakness following Eli Lilly's failed EXPEDITION3 trial. The firm is of the view that this may be a clearing event with respect to any takeout.
• Morgan Stanley called a flat to a slightly up close for Biogen, as it is of the view that aducanumab is more potent than solanezumab. The firm said indication of activity/trends would keep amyloid debate alive.
• While making note of the magnitude of decline in Biogen shares, JPMorgan said it sees a transient 5–15 percent down move in Biogen shares, although it expects the shares to recover.
• Credit Suisse said it is hard to get strong read-through conclusions from Eli Lilly's study without additional details. The firm expects the biotech space to be weak on the headline news, which is negative when positive news is needed.
• Baird said it is not making any change to Axovant Sciences Ltd (NYSE: AXON) on Eli Lilly's solanezumab failure. The firm sees Intepirdine commercial opportunity in Alzheimer's Disease to be multiple billions per year.
• Leerink had predicted a 60 percent downward plunge in AC Immune Ltd (NASDAQ: ACIU) shares if the EXPEDITION3 data were not favorable, but a 40 percent upward move on a favorable outcome on the trial. AC Immune shares were down over 15 percent on Wednesday.
• In a tweet, TheStreet's Adam Feuerstein said, "Worst thing: $LLY gamed sola study to win but still failed badly, which tells you these amyloid mAbs are weak drugs. Watch out, $BIIB."

On Wednesday:

• AC Immune slumped 15.99 percent to $11.51.
• Axovant was up 3.35 percent to $13.90.
• Biogen shares were down a more modest 4.02 percent to $305.32.
• Eli Lilly shares plunged 10.54 percent to $67.98.