Lilly stock slips after competitors halt Alzheimer’s plans

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Pfizer Inc., Johnson & Johnson and Elan Corp. are ending most plans to develop an Alzheimer’s drug after a second trial failure, a blow to the companies’ efforts to discover a product that slows progress of the disease.

Bapineuzumab, designed to attack the brain plaques that serve as a hallmark of Alzheimer’s, failed to improve symptoms of dementia in the second of four final-stage trials of the drug, Pfizer and J&J said Monday in prepared statements.

Pfizer, Elan and J&J were competing with Indianapolis-based Eli Lilly and Co. to create the first therapy to target a cause for Alzheimer’s, rather than just its symptoms. Trial results for the Lilly therapy, solanezumab, are due soon.

Lilly’s therapy also targets the build-up of amyloid plaques. Analysts say the medicine has a very small chance of suceeding, and Lilly has downplayed its importance in its drug pipeline.

“It would be very surprising at this point if Lilly’s solanezumab is successful,” Corey Davis, an analyst at Jefferies & Co. in New York, wrote in a report. “And, if we’re right, we are still many, many years away from any new approved drug for Alzheimer’s patients, unfortunately.”

Lilly stock fell 3.3 percent, or $1.44, to $42.26 per share, in early trading Tuesday.

Drugmakers have been trying for more than a decade to find therapies to slow Alzheimer’s. While companies have focused on developing drugs to hinder the amyloid deposits, scientists aren’t certain whether the clumps cause or are a minor contributor to the disease or merely a consequence.

“Alzheimer’s is a tough nut for any drug company to crack,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business, in an e-mail. “We don’t know for sure what causes it or even what it really is. There will be more failures before we see a success.”

In the Pfizer-J&J trial, the compound called Bapineuzumab didn’t help patients who don’t have a gene, called ApoE4, that boosts the risk of getting the disease. New York-based Pfizer announced on July 23 that a final-stage study of the product failed in patients with the ApoE4 gene.

The failure is “a black eye for Pfizer’s new ‘strong pipeline’ happy face,” Gordon said.

Pfizer, the world’s biggest drugmaker, has been shedding units, cutting costs and focusing on therapies in development as CEO Ian Read tries to refocus the world’s largest drugmaker on its core mission to replace revenue lost when its best-selling cholesterol pill Lipitor began facing generic competition last November.

“We believe the [Bapineuzumab] program is shut down and the company has no plans to file for approval based on the data thus far,” Mark Schoenebaum, an analyst at ISI Group. “The company has very likely already analyzed subgroups and found no signal that they believe could lead to a commercial future at this time.”

Bapineuzumab isn’t the first experimental Alzheimer’s drug against amyloid that has failed in a large trial. In August 2010, an experimental drug from Lilly that attacked amyloid in a different way failed to improve cognition in two large studies, prompting Lilly to stop developing the product.

Companies continue to pursue Alzheimer’s drugs in the face of so many unknowns because “the market is tremendous, multiple billions,” Les Funtleyder, a fund manager at Poliwogg, a private equity and hedge fund in New York, said.

If a medicine clearly worked to slow the disease, “you could be talking about the biggest drug ever,” he said.

About 5.4 million Americans have Alzheimer’s, the most common type of dementia, a number expected to increase to as many as 16 million people by 2050, according to the Alzheimer’s Association, a Chicago-based advocacy and research group.

Numerous reasons may account for the bapineuzumab trial failures, said Lon Schneider, director of the University of Southern California Alzheimer’s Disease Research and Clinical Center in Los Angeles. It could be that intervening earlier in the disease process is necessary, or that researchers need to attack amyloid in a different way, he said.

“My wish is that the investor and scientific community doesn’t interpret this as something to the effect that the amyloid hypothesis for treatment is invalid or dead,” Schneider said. “That’s not the way I’m interpreting it.”

Dublin, Ireland-based Elan will record a non-cash charge of $117.3 million in the third quarter to write down the value of its stake in the bapineuzumab program, the company said in a statement.

J&J, based in New Brunswick, N.J., said it would take an after-tax charge of $300 million to $400 million in the third quarter.

“We are obviously very disappointed in the outcomes of this trial,” Steven J. Romano, a Pfizer senior vice president, said in a statement. “We are also saddened by the lost opportunity to provide a meaningful advance for patients afflicted with mild to moderate Alzheimer’s disease and their caregivers.”

While all trials of the intravenous form of bapineuzumab in mild to moderate Alzheimer’s patients will be stopped, a second-stage brain imaging trial of a “subcutaneous version” of bapineuzumab will continue, Ellen Rose, a J&J spokeswoman, said.

Pfizer and its partners may eventually test this version of bapineuzumab in pre-Alzheimer’s patients, if the results of the second stage trial are favorable, wrote Tim Anderson, a Sanford C. Bernstein & Co. analyst in New York.
 

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