Biogen Alzheimer's data disappoints, Lilly gets slight bump

(Reuters) - Disappointing data for Biogen Inc’s experimental Alzheimer’s drug dragged shares of the company lower on Wednesday, while investors took a slightly more positive view of new findings for a treatment from Eli Lilly and Co.

Shares of Biogen traded 3.9 percent lower in midafternoon after falling as much as 4.9 percent, while Lilly was up slightly, recovering from a decline of 4.7 percent after the two companies released study data at the Alzheimer’s Association International Conference in Washington.

Wall Street analysts said the initial Lilly drop may have been influenced by the negative take on Biogen, since both of their drugs work by blocking formation of the protein beta amyloid, which is believed to cause brain plaques that are the hallmark of Alzheimer’s.

Alzheimer’s experts said there were signs for hope for both treatments, but they will wait for results of much larger confirmatory trials before getting excited.

“Developments are moving in the right direction, but are not of the magnitude that will change the world tomorrow,” said Dr. David Knopman, a Mayo Clinic neurologist and deputy editor of the journal Neurology. “There are hints of genuine benefits.”

Biogen’s drug aducanumab had been hailed as a potential breakthrough in March, when a small study showed that 3 milligram and 10 mg doses slowed cognitive decline and reduced brain plaques.

Investors had hoped that a 6 mg dose could be a safer and effective alternative to the 10 mg dose, which had also produced high rates of a type of brain swelling. On Wednesday, researchers said the 6 mg dose failed to significantly slow mental decline even though it clearly demonstrated an amyloid reduction.

“If they’re getting brain swelling at 10 mgs and their 6 mg dose is showing limited efficacy, it draws into question Biogen’s program,” said John Boris, an analyst with Suntrust Robinson Humphrey, who is attending the Alzheimer’s meeting.

Lilly researchers said on Wednesday that patients with mild Alzheimer’s disease who took the company’s solanezumab early in the course of their disease preserved more of their cognitive and functional ability than patients who received the treatment at a later stage.

Boris said Lilly’s solanezumab, if successful in a new large-scale study, is likely to be approved by 2017. That would bring it to the market at least two years before aducanumab, and represent the first medicine to slow progression of the disease affecting 5 million Americans.

Morningstar analyst Damien Conover said the Lilly data was only “slightly encouraging” because it did not compare solanezumab with a placebo.

Other analysts said Biogen’s aducanumab could still prove a potent treatment when tested in a larger population.

“The benefit still looks robust to us and better than Lilly’s solanezumab,” said Evercore ISI analyst Mark Schoenebaum. He stuck to his estimate of a 50 percent chance for success in planned late-stage trials.

Reporting by Ransdell Pierson and Bill Berkrot in New York; Editing by Chris Reese and Matthew Lewis