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Shares of Eli Lilly and Company (LLY - Analyst Report) reached a 52-week high of $50.94 on Monday with the company reporting full results on its Alzheimer’s disease candidate, solanezumab.

Eli Lilly had previously reported top-line data on the candidate from the phase III, double-blind, placebo-controlled EXPEDITION studies in August 2012. The studies were conducted in patients with mild-to-moderate Alzheimer's disease.

Although solanezumab failed to meet its primary endpoints in both the phase III EXPEDITION studies, the candidate demonstrated promising potential in slowing cognitive decline. At that time, Eli Lilly had announced that the Alzheimer's Disease Cooperative Study (ADCS) will conduct an independent analysis of the EXPEDITION study results.

The ADCS’ independent analysis of solanezumab was presented at the annual meeting of the American Neurological Association (ANA).

Results from the EXPEDITION 1 study showed that patients with mild Alzheimer’s disease taking solanezumab experienced a slowing of cognitive decline compared to patients on placebo (42% reduction in decline at the endpoint of the 18-month study). Meanwhile, results from EXPEDITION 2 showed a 20% reduction in cognitive decline in patients with mild Alzheimer's disease taking solanezumab.

Pooled results from both studies showed a 34% reduction in cognitive decline in patients on solanezumab.

As far as the safety profile is concerned, the only adverse event with an incidence of at least 1% was angina.

The results provide Eli Lilly with the option to develop solanezumab for the treatment of patients with mild Alzheimer’s disease. Eli Lilly intends to discuss the data with the regulatory authorities in order to determine the path forward. In our view, Eli Lilly will be required to conduct additional studies in the target patient population.

The Alzheimer’s disease market has attracted a lot of attention from several companies.However, the successful development of therapies for the treatment of Alzheimer’s disease is challenging and we note that several companies have failed in developing treatments for the same. In fact, Eli Lilly has faced failure before in this field. The company suffered a major setback in August 2010 when it had to halt the development of another phase III Alzheimer’s candidate semagacestat (LY450139).

Meanwhile, Pfizer, Inc. (PFE - Analyst Report) had shelved its late-stage Alzheimer’s candidate, bapineuzumab IV, after it failed two phase III studies. Pfizer was developing the candidate in collaboration with Johnson & Johnson (JNJ - Analyst Report) and Elan Corporation . Roche (RHHBY - Analyst Report) has three candidates in phase II development for Alzheimer’s disease, which could be filed for approval after 2016.

The Alzheimer’s disease market represents huge commercial potential and a successfully developed product could generate billions of dollars in sales once launched. As per data provided by the National Institute of Neurological Disorders and Stroke, approximately 5.4 million people have Alzheimer’s disease in the US alone.

We currently have a Neutral recommendation on Eli Lilly. The company carries a Zacks #4 Rank (short-term Sell rating).
 

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