Why Eli Lilly Stock Plunged on Friday

ellie lily (Ellie -2.31%) Stocks have been on a fairly strong run this year, but a new development on Friday shifted that momentum. Shares fell as much as 3.2% Friday afternoon following news that top regulators were delaying a decision on one of the company’s most important drug candidates.

FDA decision on Alzheimer’s drug delayed

That regulatory agency is none other than the U.S. government’s powerful Food and Drug Administration (FDA). On Friday, Eli Lilly said the FDA unexpectedly delayed its decision on its Alzheimer’s disease drug donanemab.

The timing for this is unclear, as the FDA notified the company that it would convene a last-minute advisory panel meeting to further review the drug’s performance in Phase 3 trials, but did not specify when that meeting would be held.

The drugmaker and many observers believed regulators would make a decision on donanemab approval by the end of the month.

Donanemab, like other Alzheimer’s drugs, has performed well in clinical tests, but there are concerns about its safety. The main focus is brain swelling and hemorrhage. Eli Lilly said the root cause of the FDA’s concerns is the safety and efficacy of the treatment.

Announce full cooperation and support

Not surprisingly, Eli Lilly continues to support Alzheimer’s disease candidates. “We are confident in the potential of donanemab to provide very meaningful benefits to patients with early-onset Alzheimer’s disease,” said Anne White, president of Lilly’s neuroscience division.

She said the company would like to release additional late-stage clinical trial results and promised to “work with the FDA and community stakeholders to create a presentation and answer any questions.”