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Lilly Claims Partial Victory for Alzheimer's Drug


Top-line results show some hope for treatment even though study goal was missed. Shares rise.

MINYANVILLE ORIGINAL Shares of Eli Lilly (LLY) are rising on hope for the company's experimental treatment for Alzheimer's disease. As expected, Lilly said the drug didn't meet primary goals in a late-stage human trial.

However, Lilly said the drug, solanezumab, did show some promise and the company plans to continue studying it. The news was a surprise as many investors gave up on the drug. The initial study data suggested the medicine slowed the cognitive decline -- which usually means things like memory loss -- in patients with mild to moderate Alzheimer's. The drug didn't improve mental ability.

"We recognize that the solanezumab studies did not meet their primary endpoints, but we are encouraged by the pooled data that appear to show a slowing of cognitive decline," said John C. Lechleiter, chief executive officer of Lilly. "We intend to discuss these data with regulatory authorities to gain their insights on potential next steps."

Shares of Lilly jumped 4% to $44 in trading Friday morning.

However, some analysts cautioned that the drug still has a way to go before being approved.

"Basically the odds of approval just went up from (about) 10 percent to maybe 20 to 30 percent," ISI Group analyst Mark Schoenebaum says. He calls chances for the drug's success "still high risk" but notes the study results are much better than expected.

The data will be very controversial, he adds. Had the drug shown to clearly meet its study goals, Lilly's stock may have jumped 50%, the analyst says. On the other hand, the stock was expected to drop on failure even though expectations for a positive result were low.

Sentiment toward Lilly's drug soured after a similar treatment being developed by Pfizer (PFE), Johnson & Johnson (JNJ) and Elan (ELN) failed in studies. (See Hope for Eli Lilly Alzheimer's Drug Wanes.) The disappointing results prompted those companies to pull the plug on their clinical program earlier this month. (See Elan Shares Drop After Alzheimer's Drug Fails in Study.)

Like other big drug companies, Lilly needs to replace sales of big products that have lost or are losing patent protection, opening them to generic competition.

Twitter: @brettchase

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