Eli Lilly said it was voluntarily terminating a Phase II study of its drug candidate LY2886721, a beta secretase (BACE) inhibitor being evaluated as a once-daily treatment for Alzheimer’s disease, after discovering “abnormal” results from liver biochemical tests.

The company said in a statement that it identified the abnormal results through routine monitoring, and does not believe they were related to the BACE mechanism of LY288621. But Lilly added that it will continue to monitor all participants with abnormal liver biochemical tests, and further evaluate its data before deciding next steps for the entire LY2886721 clinical development program.

“Discovering and developing medicines for devastating diseases like Alzheimer’s is fraught with many challenges, but Lilly’s 25-year commitment to bringing medicines to the millions of Alzheimer’s disease patients who are waiting will not wane.” Jan M. Lundberg, Ph.D., evp, science and technology, and president, Lilly Research Laboratories, said in the statement.

Lilly said it expected to incur a financial charge associated with the trial halt for LY2886721. The company did not quantify that charge, but did say it would not be enough to change previously issued 2013 financial guidance to investors.

The termination is Lilly’s third clinical setback in three years involving a candidate for Alzheimer’s, but also the first to be halted at Phase II rather than at costlier Phase III.

Lilly in August acknowledged that its Alzheimer’s candidate solanezumab missed Phase III cognitive and functional primary endpoints against beta-amyloid plaques, but later said it will conduct a new Phase III trial of that candidate in mild Alzheimer’s patients by year’s end.

And in 2010, Lilly halted development of semagacestat after preliminary results from two long-term Phase III studies showed the gamma secretase inhibitor had not slowed disease progression and was associated with worsening of clinical measures of cognition and the ability to perform activities of daily living. However, development of Alzheimer’s treatments has proven difficult enough for all drug developers, with more than 100 clinical trial failures having been recorded.

Lilly also said it remains interested in developing BACE inhibitors such as LY288621 for patients with Alzheimer’s. Lilly is one of five pharma giants with BACE inhibitors under development for the disease. The others are Merck & Co., which has launched a Phase II/III trial of its MK-8931; AstraZeneca, which in December 2012 began a Phase I study of AZD3293; Roche, which is also in Phase I with RG7129; and Eisai, which is using GE Healthcare investigational PET amyloid imaging agent, [18F]flutemetamol to help select patients for a Phase I trial for E2609.

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