February 1, 2012 / 11:30 PM / 9 years ago

Lilly Alzheimer's drug an unlikely ace in the hole

NEW YORK (Reuters) - A treatment for Alzheimer’s disease is the drug industry’s longest shot, and any brave investors willing to place a bet on the outcome are likely to focus on Eli Lilly & Co.

Lilly and Pfizer Inc are the farthest along in developing experimental medicines for the memory-robbing disease. But Lilly, as the far smaller company, has much more upside for its share price if it hits pay dirt.

The field is littered with high-profile failures, one of the most recent being a previous Lilly compound.

Lilly’s latest contender, solanezumab, is designed to bind to and mop up a protein called amyloid beta, the main component of amyloid plaque deposits in the brains of patients with Alzheimer’s disease.

Anticipation over the drug has built up slowly. Lilly is expected to release as soon as this summer final data from two 18-month studies of the treatment. Earlier this week, the company said an independent safety monitor had given researchers the green light to continue with the late-stage trials.

That go-ahead suggested the drug so far has sidestepped the kinds of safety issues that doomed the earlier Lilly medicine called semagacestat in 2010. With no real treatment on the market, even the slightest sign of success could bring a windfall to Lilly, Wall Street analysts say.

“If there are statistically significant positive results, showing a benefit of any kind with this drug, Lilly shares could go up as much as 50 percent or more,” said Leerink Swann analyst Seamus Fernandez.

But if the trials fail, Lilly shares would likely fall no more than 10 percent, Fernandez said, noting that the share price already reflects investor skepticism of the drug’s ability to slow progression of the disease.

“Lilly’s own internal outlook assigns an extremely low probability; they know it’s a very high risk, high reward” proposition, Fernandez said in a recent interview.

Lilly shares have risen 13 percent in the past year, compared with an 8 percent rise for the ARCA Pharmaceutical Index of large drugmakers. Many investors hold the stock for its hefty dividend, which the company has pledged to preserve in coming years despite a host of challenges.

The Indianapolis-based drugmaker badly needs big new drugs to offset plunging sales of its Zyprexa schizophrenia treatment, which in October began facing cheaper generics. Lilly also faces looming generic competition for its Cymbalta antidepressant.

The group Alzheimer’s Disease International estimates there are now 36 million people with the disease worldwide and that the number will almost double to 66 million by 2030. So treating Alzheimer’s is considered the Holy Grail for the pharmaceutical industry, one of the few therapeutic areas where a new medicine could achieve the multibillion-dollar blockbuster scale achieved by the likes of Pfizer’s cholesterol fighter Lipitor.

“Barring success for solanezumab, we continue to see Lilly as unable to meaningfully offset the loss of its core franchises to generic entry,” JP Morgan analyst Chris Schott wrote in a research report. He gave the drug a “low likelihood” of success.


Lilly halted late-stage trials of semagacestat after a monitoring board took an early peek at confidential trial data and determined the pill was actually worsening patients’ memories and their ability to perform daily tasks.

Semagacestat worked by blocking production of an enzyme that makes amyloid beta rather than removing that protein from the bloodstream and the brain — as solanezumab is designed to do.

Most researchers believe amyloid plaques cause the progressive disease which afflicts more than 5 million Americans, although the hypothesis has not yet been proven.

Nearly a dozen drugs in the past decade have tried to stop buildup of the plaques or to remove them, but none have made real headway against the disease.

“Nobody has ever come up with a disease-modifying compound,” said Eric Siemers, a Lilly neurologist who oversaw the failed semagacestat studies and is now in charge of the solanezumab trials.

Current medicines for Alzheimer’s disease, including Pfizer’s Aricept and Namenda from Forest Laboratories, temporarily improve mental function. But they don’t appreciably slow progression of the disease, which is becoming ever more common due to the world’s aging population.

Siemers said solanezumab would be deemed successful if it slows progression of Alzheimer’s by 35 percent in patients, all of whom began the studies with mild to moderate symptoms.

“If you talk to physicians who treat these patients, they’ll say if you slow it down by roughly a third, that’s worthwhile,” Siemers said. Should the trials succeed, he said Lilly could seek approval for the medicine as soon as 2013.

Dr. Sam Gandy, director of Mount Sinai School of Medicine’s Center for Cognitive Health, said brain scans and new imaging agents in the past few years have enabled doctors to detect plaque long before symptoms of Alzheimer’s develop.

“The demand for new evaluations is already skyrocketing,” he said, due to the swelling number of patients with the disease and in part because of availability of the new tests. Increasingly, he is seeing patients in their 50’s.

A drug that delays symptoms for just a few years would make a major difference, Gandy said.

“That’s the sort of thing we want to see because Alzheimer’s disease really decimates the quality of life and the cost of care begins the moment they lose their ability to be independent,” Gandy said. “Every patient costs about $100,000 a year to care for, and the numbers add up quite quickly.”

Dr. P. Murali Doraiswamy, a Duke University professor of biological psychiatry and advisor to the Alzheimer’s Foundation of America, said success for solanezumab would be a landmark achievement.

“I personally think the chances are almost zero,” he said, noting that so many previous drugs have failed because they tried to treat people who already showed symptoms of Alzheimer’s.

Doraiswamy’s wariness also extends to a bapineuzumab, an injectable treatment from Pfizer and Johnson & Johnson undergoing late-stage trials due to conclude in coming months. The drug blocks production of an enzyme that makes amyloid beta protein.

Patients receiving the Pfizer drug for 18 months in one small mid-stage study had an almost 25 percent lower accumulation of amyloid plaque than those receiving placebo injections, but achieved no cognitive benefits, he said.

Moreover, he said patients receiving high doses of the drug in another Phase II study had worrisome brain swelling.

If both the Lilly and the Pfizer drugs fail, but don’t show toxic side effects, Doraiswamy said there is a good chance they can be tested in future trials among patients not yet diagnosed with Alzheimer’s but deemed at risk of developing symptoms.

That would make them candidates for preventing Alzheimer’s from taking root, the likely new frontier for drug testing.

“We’re at a major crossroads,” Doraiswamy said.

Reporting By Ransdell Pierson; Editing by Michele Gershberg

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