Eli Lilly and Co's experimental drug failed to slow loss of cognitive ability in patients with mild Alzheimer's disease in a large trial, a major setback for the company and millions of people with the memory-robbing disease.
Shares of the US drugmaker fell 13 percent in pre-market trading.
Based on the failure of the Phase III study, Lilly said on Wednesday that it would not seek US approval of the infused drug for mild dementia.
Some analysts had said solanezumab, if approved, could eventually claim more than US$5 billion in annual sales and boost Lilly's earnings for years to come.
Researchers said patients treated with solanezumab did not experience a significantly greater slowing in cognitive decline than those given placebos, as measured by a widely used scale called ADAS-Cog14.
Lilly said it would take a US$150 million charge in the fourth quarter for the clinical setback and provide an updated 2016 financial outlook, as well as 2017 forecasts, on December 15.