Lilly’s sola takes one step back as big question remains unanswered

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Solanezumab gives with one hand and takes away with the other. The latest data snippet about the Alzheimer’s disease project, dribbled out at Lilly’s third-quarter conference call, revealed that an important secondary endpoint in phase III had been missed. Combined with poor earnings, the finding brought the Indianapolis company’s overheated stock down 3% to $50.50.

Lilly could yet be buoyed by upcoming clinical and regulatory data, including further solanezumab tidbits expected at next week’s Clinical Trials on Alzheimer’s Disease meeting in Monte Carlo. However, the most important question for investors – whether solanezumab might be filed based on the completed phase III studies alone – has still not been answered.

Even the more bullish analysts, such as those at Bernstein, expect additional trials to be necessary, leading to a solanezumab filing around 2016. Lilly said it would provide an update once it received clear guidance from regulatory authorities.

Not ticking the boxes

Management said it was “encouraged by data on the slowing of cognitive decline in mild Alzheimer’s”, which most recently caused ripples of excitement at the American Neurological Association meeting (Lilly’s sola dream stays alive but expectations depart from reality, October 9, 2012).

However, on yesterday’s call it was revealed that the project had failed to reach statistical significance in clinical dementia rating – sum of boxes (CDR-SOB), a secondary endpoint in its Expedition and Expedition 2 studies. CDR-SOB is a summary of patient questionnaires assessing dementia severity across cognitive and functional domains, and many doctors consider it an important measure in Alzheimer’s.

Lilly also confirmed that solanezumab’s effect on biomarkers was mixed, with an effect seen on cerebrospinal fluid levels of amyloid beta and plaque but none on phospho-tau or brain atrophy as measured by volumetric MRI; while more clarity on these and other secondary endpoints might be presented in Monte Carlo next week, for now investors will have to contend with the complex secondary analyses that have shown a positive effect on cognitive measures – and the glimmer of a functional improvement – across the pooled mild population.

These surprise findings had been among several recent positive readouts that have spurred a 22% year-to-date share price increase for the previously failure-prone Lilly.

Another was the phase III success of ramucirumab monotherapy in second-line gastric cancer (Lilly’s ramucirumab comes off the bench with a clutch single, October 16, 2012). Lilly has now confirmed that results from this study, which had actually been designed to support a combination therapy trial, were strong enough to discuss with regulators the possibility of making a standalone submission.

Neck and neck

In Alzheimer’s solanezumab had been neck and neck with another beta amyloid-targeting agent, bapineuzumab (Fires going out for bapineuzumab in Alzheimer’s, September 12, 2012). Although recently disclosed biomarker data had given some hope, bapineuzumab seems officially to have been killed off, with Elan confirming that it had taken a $117m charge against the value of its stake in the project, which it shares with Johnson & Johnson. A phase II study of subcutaneous bapi continues.

Still, this was nowhere near the biggest pharma writeoff reported yesterday. That embarrassing honour belonged to Bristol-Myers Squibb, another patent expiry-plagued company whose stock has been riding high, which took a one-off $1.8bn charge to write off all the in-process R&D that had been associated with its hepatitis C project BMS-986094 (Bristol-Myers setback another blow to hep C field, August 24, 2012).

As if there had been any doubt, this confirmed that the $2.5bn acquisition of Inhibitex that had brought BMS-986094 to Bristol was money down the toilet.

At least Lilly does not have to contend with this scenario. Upcoming regulatory talks will determine just how justified its share price is.

To contact the writer of this story email Jacob Plieth in London at jacobp@epvantage.com

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