Why Eli Lilly Stock Flopped on Friday

Eli Lilly (LLY -2.31%) stock was on quite a roll this young year, but a new development shifted that momentum on Friday. The shares fell as much as 3.2% in price on Friday afternoon, following the news that a top regulator is delaying a decision on one of the company’s most important drug candidates.

FDA decision on Alzheimer’s drug delayed

That regulator is none other than the U.S. government’s powerful Food and Drug Administration (FDA). On Friday, Eli Lilly said that the FDA has unexpectedly pushed back its decision on Alzheimer’s disease treatment donanemab.

The timing for this is unclear, as the FDA informed the company that it would convene a last-minute meeting of advisors to further review the drug’s performance in a phase 3 trial, but did not specify when the meeting would occur.

The pharmaceutical company and many observers believed that the regulator would render a decision on approving donanemab by the end of this month.

While donanemab has done well in clinical testing, like other Alzheimer’s drugs there are worries about its safety. Chiefly, these center on brain swelling and bleeding. Eli Lilly said that the root of the FDA’s concerns are the safety and efficacy of this treatment.

Signaling full cooperation and assistance

Understandably, Eli Lilly continues to stand behind its Alzheimer’s candidate. It quoted the president of the Lilly Neuroscience unit, Anne White, saying, “We are confident in donanemab’s potential to offer very meaningful benefits to people with early symptomatic Alzheimer’s disease.”

She added that the company is eager to further present the late-stage clinical trial results, and pledged to “work with the FDA and the stakeholders in the community to make that presentation and answer all questions.”