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%.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.