Shares in Chugai Pharmaceutical tumbled the most since 1977 after late-stage trial data on an obesity drug it licensed to Eli Lilly & Co. showed disappointing results.
The stock price of Japan¡¯s largest drugmaker sank as much as 20% in Tokyo on Friday, wiping out over $16 billion in market value, or ?1,458 ($9.89) per share, after the drug¡¯s study resulted in lower weight loss and higher rates of nausea and vomiting than anticipated.
Patients on the highest dose of the drug lost 12.4% weight, lower than 15% achieved by patients on a pill developed by rivals Novo Nordisk, wrote Jefferies Japan analysts Stephen Barker and Miyabi Yamanaka.
¡°With efficacy and safety levels at the lower end of market expectations, Lilly¡¯s share price was down 14.5% on the day. Assuming 30% of the ?14 trillion drop in Lilly¡¯s market capitalization corresponds to Chugai royalties, we put related downside risk for Chugai at ?2,300,¡± said Citi analyst Hidemaru Yamaguchi.
¡°The results have not led to a big differentiation with rival pills,¡± Hiroyuki Matsubara, an analyst at Nomura Securities, wrote in a note.
On Wall Street, Eli Lilly¡¯s share prices fell 14% on the news while Novo Nordisk¡¯s shares in Denmark jumped 6.7%.
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