12/12/2012 07:46 am ET Updated Feb 11, 2013

Solanezumab: Alzheimer's Drug Gets Second Chance In New Trial

By Ransdell Pierson

Dec 12 (Reuters) - Eli Lilly & Co plans to conduct a big new trial of its experimental Alzheimer's disease treatment among patients with mild symptoms, keeping alive a drug that failed two earlier large studies among patients with mild to moderate Alzheimer's.

Lilly said on Wednesday it decided, after talks with health regulators, not to seek U.S. approval of the drug, solanezumab, at least for now, based on data from the earlier trials. The data showed solanezumab helped some patients with mild Alzheimer's but fell short in the wider group.

Instead, Lilly plans to begin another late-stage trial that only enrolls those with mild symptoms. Additional details, including the study's design and duration, are still being determined.

"We remain encouraged and excited by the solanezumab data," David Ricks, president of Lilly Bio-Medicines said.

In premarket trading, Lilly shares fell 3.2 percent to $49.

The company plans to begin the new Phase III study by no later than the third quarter of 2013. Industry analysts have predicted a big new trial in patients with mild Alzheimer's could take three years.

They say solanezumab could generate annual sales of $2 billion to $7 billion, if proven safe and effective in that population as no drug has been able to stave off progression of the disease.

Other analysts, however, have been less impressed with the solanezumab data and predicted Lilly would not go to the trouble and expense of conducting another trial.

An estimated 5 million Americans have Alzheimer's, the biggest cause of dementia. More than 35 million people worldwide are believed to have dementia, including Alzheimer's disease, and those numbers are expected to rise as more countries see lifespans increase.

Lilly badly needs new medicines because its earnings will plunge through 2014 as its biggest products face competition from cheaper generics.

Solanezumab could play a big role in reviving company results, should it win approval, Leerink Swann analyst Seamus Fernandez said.

Lilly said in August its experimental drug, given by intravenous infusion, appeared safe but failed to prevent progression of mental and physical decline in two big studies that enrolled patients with mild to moderate Alzheimer's.

But combined results of the two Phase III studies showed the drug reduced progression of cognitive declines by more than 30 percent in patients with only mild symptoms. It did not slow the loss of physical function, such as the ability to dress and other activities of daily living.

A similar, closely watched drug from Pfizer Inc, bapineuzumab, earlier this year also failed in big studies. Researchers did not cite any benefits to patients with mild symptoms.

Both drugs work by blocking beta amyloid - protein fragments that form toxic plaques in the brain that are considered a hallmark of Alzheimer's disease.

Lilly, along with Merck & Co Inc and others, is developing another type of treatment that blocks amyloid through a different route - by inhibiting production of an enzyme called beta secretase.

Leerink Swann's Fernandez said the BACE inhibitors may be "closer to the Holy Grail" in treating Alzheimer's than drugs like solanezumab, and that a safe and effective one could capture annual sales of $10 billion or more.

Lilly research chief Jan Lundberg, in an interview with Reuters last week, predicted the company will do for Alzheimer's patients what it did almost a century ago for diabetics - find a breakthrough treatment, even though skeptics say it could take years. (Reporting by Ransdell Pierson; Editing by Jeffrey Benkoe)