Eli Lilly & Co. (LLY) said it will conduct an additional late-stage study of its experimental Alzheimer’s treatment, a move that could push the drug’s introduction back three years to 2016. The shares fell.
Lilly doesn’t believe it has enough data to gain U.S. marketing clearance for the medicine, based on conversations with the Food and Drug Administration, the Indianapolis-based company said in a statement today.
While the drug, called solanezumab, failed to meet the main goal of two large studies, an analysis of the data from that research found it did slow progression in people with milder stages of Alzheimer’s. The new study, looking only at those patients, will start by the third quarter of 2013, Lilly said. That could delay FDA approval until 2016, said Mark Schoenebaum, an analyst with ISI Group in New York.
“Given wide-ranging investor expectations, we’d expect Lilly to be down at least $1 on this news,” said Seamus Fernandez, an analyst with Leerink Swann in Boston, in a note to investors. “However, we believe it is the right decision for solanezumab as it avoids setting up what we believe would have been a negative catalyst.”
Lilly fell 3.2 percent to $49 at 4 p.m. New York time. The stock has gained 26 percent in the past 12 months, in part, on positive expectations for solanezumab.
The only other Alzheimer’s therapy in final-stage testing is Baxter International Inc. (BAX)’s Gammagard. The product from the Deerfield, Illinois-based company is an expensive, scarce treatment for those whose immune systems can’t protect them from infection. Results on whether it could slow or stop Alzheimer’s may be available next year.
Merck & Co., based in Whitehouse Station, New Jersey, said this month it moved an experimental Alzheimer’s treatment into the second of three stages of testing required to get market clearance and could begin a larger study by late 2013. That could put Merck and Lilly in a head-to-head race to become the first drugmaker to sell a treatment to slow the progression of the mind-wasting disorder.
While Alzheimer’s researchers had widely expected Lilly would have to do more study to garner approval, Lilly said it was waiting to discuss its options with regulators before making a decision. If approved, solanezumab would be the first treatment to alter the course of Alzheimer’s, a market that may be worth as much as $10 billion.
Solanezumab attaches to a protein called beta amyloid that clumps in the brains of Alzheimer’s patients. Lilly’s treatment is designed to prevent those clumps from forming.
Drugs on the market now address only the symptoms, not the underlying cause, and none has been shown to slow progression of the disease. About 5.4 million Americans have Alzheimer’s, the most-common form of dementia, a number expected to surge to as many as 16 million by 2050 as the population ages, according to the Alzheimer’s Association.
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