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Why the FDA's Rejection of Eli Lilly's Alzheimer's Drug Is Actually Great News for the Stock

Why the FDA's Rejection of Eli Lilly's Alzheimer's Drug Is Actually Great News for the Stock

When the Food and Drug Administration (FDA) rejects a key drug from a healthcare company, it can send the stock spiraling into a sell-off. In order for the FDA to be confident in a drug's effectiveness, it needs to have a large enough sample size to evaluate it. Unfortunately, in Eli Lilly's case, it simply didn't have enough data points for the agency to make a positive conclusion about the treatment and grant it accelerated approval.