* Talking to potential partners with more expertise
* AstraZeneca ready to start Phase III tests on BACE drug (Adds quote, details on competitors, background)
By Ben Hirschler
LONDON, May 7 (Reuters) - AstraZeneca, fighting a $106 billion bid approach from Pfizer, is talking to other companies as it seeks a partnering deal for its experimental Alzheimer's drug.
Briggs Morrison, global head of medicines development, said AstraZeneca was is talks with firms with more experience of Alzheimer's about a deal to share development of its so-called BACE inhibitor drug, which is set to enter late-stage Phase III development.
A deal to share Phase III costs and share eventual profits was probably the easiest approach, he told reporters on Wednesday, but AstraZeneca could also out-license the product, known as AZD3293, and take a royalty on any eventual sales.
AstraZeneca believes its BACE inhibitor could potentially sell as much as $5 billion a year, but it gives it only a 9 percent chance of success on a risk-adjusted basis given the high failure rate in the disease sector.
"We're having talks with many of our peers who have spent a lot more time in Alzheimer's and have very good Alzheimer's development expertise," Morrison said. "There is no deal done yet but we are continuing the conversations."
The British company set out its defence against the Pfizer takeover on Tuesday, touting its strong long-term growth potential as an independent company.
Most of the pipeline focus at AstraZeneca is on drugs for cancer, diabetes, respiratory and cardiovascular disease, with neuroscience projects - including Alzheimer's - no longer a core area for the group.
BACE inhibitor drugs work by blocking an enzyme called beta secretase that is involved in production of beta-amyloid, a protein that creates brain plaques considered a major cause of Alzheimer's.
They are viewed as a promising new approach to fighting the memory-robbing condition and have taken centre stage after an injectable class of medicines targeting beta-amyloid plaque failed or fell short in trials conducted by Pfizer and Eli Lilly .
Merck & Co is currently in the lead in the BACE inhibitor field, with the first Phase III data from the U.S. company's programme likely to emerge in around 2017.
Dementia - of which Alzheimer's disease is the most common form - already affects 44 million people worldwide and this is set to reach 135 million by 2050, according to Alzheimer's Disease International, a non-profit campaign group.
Unlike heart disease and cancer, no major advancements have been seen in Alzheimer's drug research since the first treatment was approved in 1993 by U.S. regulators.
Current Alzheimer's drugs, including generic forms of Pfizer's Aricept (donepezil), can minimally and briefly help memory and ability to perform daily functions, but do not slow the disease. (Editing by Kate Holton and Tom Pfeiffer)