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Acquisition big step for Lilly Diagnostics

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Eli Lilly and Co.’s $800 million acquisition of Avid Radiopharmaceuticals Inc. is the biggest step yet in the drugmaker’s attempt to add diagnostics to its product portfolio.

A year ago, Lilly hired Tiffany Olson, the former CEO of Roche Diagnostics North American headquarters in Indianapolis, to create a diagnostics strategy. Lilly’s diagnostic unit officially launched in June, with Olson declaring particular interest in Alzheimer’s and cancer. Lilly CEO John Lechleiter chimed in that diagnostics is one of the most promising areas for Lilly acquisitions.

So Lilly followed through, announcing its acquisition plans Nov. 8. Philadelphia-based Avid has submitted to the U.S. Food and Drug Administration an imaging agent that would, for the first time, allow physicians to get see the amyloid plaques in the brain of living Alzheimer’s patients. The plaques are widely thought to cause the memory-sapping and fatal disease.

Currently, Alzheimer’s is diagnosed only by a subjective determination based on a patient’s responses to a series of questions. Not until a patient dies can the amyloid plaques be viewed under a microscope, during an autopsy procedure.

But Avid’s agent, called florbetapir, can be introduced to the brain through the blood and bind nearly exclusively to amyloid plaques. It also is radioactive, so it shows up clearly on a PET scan image of a patient’s brain—a scan that can be performed when the patient is still alive.

“The unmet need today is that Alzheimer’s is only clinically proven through an autopsy. This allows clinicians to look at the pathology of the disease in a living human being,” Olson said. “For us this just made very good sense in our wanting to build our Alzheimer’s business.”

Lilly has been using florbetapir since 2007 in its clinical testing of two experimental Alzheimer’s treatments. One of those has now been abandoned, but the second, solanezumab, is still being developed. Lilly Ventures, the company’s venture-capital arm, invested in Avid during its first round of fundraising in 2005.

But Lilly also sees florbetapir as a product that can produce new revenue—something it desperately needs as its top-selling drugs are set to lose patent protection in the next three years. Of the purchase price, $500 million hinges on regulatory approval and sales success.

Avid already has partnered with many other pharmaceutical companies that have used its imaging agent to identify patients with Alzheimer’s as early as possible—so their drugs have a chance to make an impact. In total, drug companies are working on 98 experimental drugs to treat dementia, most of them focused on Alzheimer’s, according to the industry group PhRMA.

Avid CEO Dan Skovronsky looked for a partner to help his 53-person firm take his new product—assuming it is approved—around to primary-care doctors, neurologists, psychologists and imaging centers.

Lilly’s history and sales force in the neurosciences—with products like the antipsychotic Zyprexa and the antidepressants Prozac and Cymbalta—made it the obvious choice, Skovronsky said. If approved, Lilly’s sales force would do the detailing on florbetapir.

“We have to be able to get it out there to the people who can really benefit,” he said. “We really saw Lilly as the leader in neuroscience. At the end of the day, it really made this a pretty easy decision for all of us.”

Avid has more imaging agents in development, some focused on neurological disorders like Parkinson’s disease and others focused on diabetes.

Lilly’s first effort at pushing diagnostics came in July when it agreed to have its sales reps talk up to doctors a blood test made by a San Diego firm that measures the clotting ability of each patient’s blood after taking a blood thinner.

From Lilly’s standpoint, the idea was to identify which patients aren’t benefiting from the leading blood thinner, Plavix, and thereby identify good candidates for Lilly’s new blood thinner, Effient.

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