MRK Merck and Co Inc

By Peter Loftus 

An experimental Eli Lilly & Co. drug failed to significantly help Alzheimer's disease patients in a closely watched clinical trial, dealing another blow to the pharmaceutical industry's long quest to find a better treatment for the condition.

The disappointing outcome also may revive doubts about an entire branch of Alzheimer's research that has dominated the industry's efforts in the past decade. Lilly and other companies have developed drugs that try to stop the buildup of a sticky protein in the brain known as beta amyloid -- believed by many to be the primary culprit in the disease. But none of these drugs has worked in a major patient study, and Lilly's failure could spur efforts to pursue alternative drug targets.

The news sent Lilly shares tumbling more than 14% in premarket trading Wednesday. Shares of Biogen Inc. and Merck & Co., which also are developing anti-amyloid drugs, dropped 8.2% and 2.8%, respectively.

The latest share-price declines worsen an already tough year for drug stocks, as companies contend with a backlash against rising prescription prices and other challenges. The NYSE Arca Pharmaceutical Index is down 13% year-to-date and the Nasdaq Biotechnology index is down 17%, while broader market indexes are up for the year.

Current treatments for the fatal disease can alleviate symptoms but don't slow the condition's underlying progression. The dementia-causing brain disorder afflicts an estimated five million Americans, but has been a tough disease for the drug industry to crack because scientists don't fully understand what causes it.

Companies including Pfizer Inc. and Johnson & Johnson have scrapped many experimental drugs that initially looked promising but failed to significantly slow deterioration of memory and other cognitive and daily-living skills of Alzheimer's patients in clinical trials.

Despite the setbacks, the industry has continued to hunt for better treatments because of the limitations of current options. And a huge market opportunity awaits drugs that can slow or halt disease progression rather than temporarily alleviate symptoms. J.P. Morgan estimates annual sales of such drugs, if they eventually reach the market, could top $20 billion.

Lilly said in a press release Wednesday it wouldn't apply for regulatory approval to market its experimental Alzheimer's drug, solanezumab, for the treatment of mild dementia due to Alzheimer's disease. The company said the drug failed to significantly slow cognitive decline in patients with mild disease compared with a placebo in the "Expedition 3" study.

"The treatment effect still proved to be not sufficient to result in a significant slowing of cognitive decline," Leerink Partners analyst Seamus Fernandez wrote in a research note.

The study was a risky and costly bet for Lilly because two prior studies of solanezumab, the results of which were reported in 2012, also had mostly negative results. But Lilly scientists had seen a ray of hope because the drug appeared to slow cognitive decline in a subgroup: patients with a mild form of the disease. Patients with mild symptoms may have some memory loss but haven't fully lost the ability to perform daily functions like getting dressed.

Lilly started the newer study in 2013, enrolling about 2,130 patients with mild Alzheimer's symptoms and signs of amyloid plaque in the brain as determined by imaging scans or spinal-fluid tests. About half of the patients received solanezumab, infused intravenously once every four weeks, and the other half got a placebo.

The main goal of the study was to test whether solanezumab slowed the decline in cognition versus a placebo. One of the secondary goals was to test whether the drug slowed decline in function versus placebo. Patients were analyzed after 18 months of treatment. Lilly said Wednesday the study results "directionally" favored solanezumab on secondary goals, but the magnitude of the benefit was small.

Lilly hasn't disclosed total costs of developing the drug, but Eric Siemers, a lead Lilly Alzheimer's researcher, said in a recent interview it has been in the hundreds of millions of dollars.

Lilly said Wednesday it would record a fourth-quarter charge of about $150 million, or 9 cents a share, in connection with the study failure.

The trial's results "were not what we had hoped for and we are disappointed for the millions of people waiting for a potential disease-modifying treatment for Alzheimer's disease," Chief Executive John Lechleiter said.

--Austen Hufford contributed to this article.

Write to Peter Loftus at peter.loftus@wsj.com

(END) Dow Jones Newswires

November 23, 2016 09:29 ET (14:29 GMT)

Merck (NYSE:MRK)
Historical Stock Chart
From Mar 2024 to Apr 2024

Merck (NYSE:MRK)
Historical Stock Chart
From Apr 2023 to Apr 2024