Eli Lilly & Co.(NYSE:LLY) has been downgraded to
Underperform by Cown & Co, citing risks in the drug firm's ability to
develop new treatments and a patent dispute over its cancer treatment Alimta.
The research firm said in a note that the drug firm's
shares are trading much higher than what it actually should, considering the
risks attached to its business.
Shares of the company have risen by more than fifth
this year, most of the gains coming during August, when it released preliminary
results from trials that showed that solanezumab, its drug to treat Alzheimer's
slowed down the process of mental decline in patients suffering from a milder
form of the disease.
Analyst Steve Scala said that "solanezumab
accounted for much of the stock's recent run," but according to him the
drug was not likely to be a success and it would fail.
He wrote that he did not believe in the existing data
and said that it was not sufficient for regulatory approval, and Lilly will
pass on conducting another large, expensive study for more data.
Scala lowered his rating on Lilly shares to
"underperform" from "neutral." The new rating means he
expects the stock to perform worse than the Standard & Poor's 500 index.
Shares in Eli Lilly fell 0.3 percent to $50.45, though
it rose about 0.15 percent in after-hours trading.
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