Double dose of woes for Eli Lilly, as it drops Ph III AD drug semagacestat and FDA panel could say no to expanding use of Cymbalta

The last few days have seen a spate of bad news for US drug major Eli Lilly, which yesterday said it will halt development of its potential Alzheimer's drug semagacestat, a gamma secretase inhibitor, because preliminary results from two ongoing long-term Phase III studies showed it did not slow disease progression and was associated with worsening of clinical measures of cognition and the ability to perform activities of daily living.

Lilly's shares dropped 3%, to $34.59 in morning trading yesterday, after the announcement. The failure of semagacestat will also increase concerns about Lilly's future growth, given the looming loss of patent protection through 2014 on drugs that now account for 60% of the firm's total sales, as well as a negative patent ruling on Strattera (atomoxetine) and a likely unfavorable decision on expanding the use of its antidepressant Cymbalta (duloxetine).

Solanezumab development not affected