Eli Lilly & Co. (LLY) halted testing on an experimental treatment for schizophrenia after the company determined the drug was unlikely to show a benefit in patients.
Development of pomaglumetad methionil was stopped after an analysis of a large-scale study found the drug appeared to be ineffective, the Indianapolis-based company said today in a statement. The decision wasn’t based on safety, Lilly said.
Lilly also said today that pomaglumetad methionil didn’t show a benefit in a smaller study that looked at its benefits when combined with another treatment. Last month, the company announced the drug had failed in another large-scale trial. Analysts had low sales expectations for the medicine with ISI Group analyst Mark Schoenebaum in July estimating peak annual revenue of $250 million.
“I’m disappointed in what these results mean for patients with schizophrenia who still are searching for options to treat this terrible illness,” Jan Lundberg, president of Lilly’s research laboratories, said in the statement. “While there are many challenges in this complex field of research, neuroscience remains a core area of focus at Lilly.”
Lilly shares rose 1 percent to $45.17 at 4 p.m. New York time.
The drugmaker is in need of new treatments as the company braces for the expected loss of as much as $7 billion in sales to generic competition over the next five years. Lilly now has 11 compounds in the final stages of testing.
Lilly said it is working to move the people in the phase III study of pomaglumetad methionil to clinical care outside the trial. The decision to stop the research is expected to result in a third-quarter pretax charge of $25 million to $30 million, or 2 cents a share after tax, the company said. The treatment was in the final stages of testing required to get U.S. regulatory approval.
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