There was more bad news for Eli Lilly following the spectacular failure of its late-stage Alzheimer’s disease candidate, and a new question mark over the future of Cymbalta in chronic pain.

The group’s shares closed down nearly 3% last night as shareholders mulled over news that the company is pulling the plug on semagacestat for Alzheimer’s disease, after the experimental drug disappointed in Phase III trials.

Preliminary findings show that not only did semagacestat, a gamma secretase inhibitor, fail to slow disease progression, but that it was actually associated with “worsening of clinical measures of cognition and the ability to perform activities of daily living”.

In addition, the data showed that patients taking Lilly’s drug had an increased risk of skin cancer compared with those in the placebo arm, putting the final nail in the clinical programme. But the company will continue collecting follow-up data for at least six months, “for the benefit of future Alzheimer’s research”.

Jan Lundberg, executive vice president, Science and Technology, and president of Lilly Research Laboratories, said the news is disappointing “for the millions of Alzheimer's patients and their families worldwide who anxiously await a successful treatment for this devastating illness,” but stressed that Lilly's “commitment to beating Alzheimer's will not waver”.

John Lechleiter, Lilly's chairman and chief executive officer, also sought to reassure shareholders, pointing out that the firm’s innovation strategy is based on a pipeline of nearly 70 molecules in clinical development, and “does not rest on the success or failure of any single compound”.

But Jon LeCroy, of Hapoalim Securities in New York, told Bloomberg that the drug’s failure is “clearly another blow to [Lilly’s] weak pipeline, and it increases the pressure on them to make some sort of acquisition.”

Charge to earnings

Because of the risks associated with the drug, Lilly said it is contacting all clinical trial investigators to ensure that study participants stop taking semagacestat immediately, and added that the decision to cease its development is expected to result in a third-quarter charge to earnings of approximately $0.03 to $0.04 per share.

In another potential blow for Lilly, staff at the US Food and Drug Administration have raised questions over the firm’s application to market its blockbuster antidepressant Cymbalta (duloxetine) for chronic pain.

In documents posted on the agency’s website yesterday, points over the potential for liver toxicity and the appropriateness of the drug’s wider use, particularly as the antidepressant carries a black-box warning regarding higher risks of suicide in children and young adults, were highlighted, ahead of a public meeting on Thursday.