Why Elan Shares Sank

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of drugmaker Elan (NYSE: ELN  ) dipped as much as 16% today after it and its drug development partners reported disappointing late-stage trial results for Alzheimer's treatment bapineuzumab.

So what: In 2009, Elan sold the rights to its Alzheimer's' immunotherapy program to Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson (NYSE: JNJ  ) , but retained financial interests in bapineuzumab. Last night, Pfizer (NYSE: PFE  ) and marketing partner J&J noted that bapineuzumab wasn't effective versus the placebo in one of its four ongoing late-stage trials to treat mild-to-moderate forms of Alzheimer's. Specifically, this trial targeted the APoE4 gene. All companies involved plan to continue with the three remaining trials.

Now what: Bad news all around today, because there aren't many options available to treat Alzheimer's. Eli Lilly (NYSE: LLY  ) is also developing a competing Alzheimer's drug, solanezumab, with data expected sometime over the next few months, but even it is down in sympathy with Elan.

Speaking specifically of Elan, which is best known for multiple sclerosis drug Tysabri, which it markets in partnership with Biogen Idec (Nasdaq: BIIB  ) , I wouldn't consider today's move lower a buying opportunity. For the most part, Tysabri sales have matured, and after today's results there are few guarantees that its remaining trials will provide better results. All things considered, there are far better values and stronger pipelines out there than what Elan has to offer.

Craving more input? Start by adding Elan to your free and personalized Watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Johnson & Johnson and Pfizer, as well as creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1955423, ~/Articles/ArticleHandler.aspx, 10/24/2016 6:18:43 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
ELN.DL2 $0.00 Down +0.00 +0.00%
Elan CAPS Rating: ***
BIIB $290.78 Up +0.13 +0.04%
Biogen CAPS Rating: *****
JNJ $113.61 Up +0.17 +0.15%
Johnson and Johnso… CAPS Rating: ****
LLY $77.57 Down -0.68 -0.87%
Eli Lilly and Co. CAPS Rating: ***
PFE $32.13 Down -0.05 -0.16%
Pfizer CAPS Rating: ****