Sometimes the Bear Gets You: Myriad/Lundbeck Edition

As far as $100 million bets go, this one went south pretty quickly. Only five weeks ago Lundbeck licensed European rights to Myriad Genetics' Phase III Alzheimer's candidate Flurizan, knowing that what cost $100 million upfront in May would cost much more in July should a results of an 18-month Phase III trial of the drug turn out positive. The drug missed each of its primary endpoints, Myriad said in a short statement early this morning. Development of the drug has been discontinued.

For Lundbeck a big part of the backstop to its Lexapro/Cipralex depression franchise, due to go off patent 2012-14, is now gone. Lundbeck shares are off 10% in morning trading. And once markets open in the US, Myriad is likely to lose a big chunk of its own $2 billion market capitalization.

At the time of the deal we thought that Lundbeck's endorsement of what was seen as a risky project reflected a better chance of success--perhaps in hindsight it was just desperation.