Eli Lilly (LLY), the pharmaceutical giant behind the antidepressant Prozac and the erectile dysfunction treatment Cialis, said Tuesday it is halting the development of a potential Alzheimer's treatment after preliminary results from late-stage studies showed the experimental drug not only failed to slow the progression of the disease, it actually worsened patients' cognition and their ability to perform the activities of daily living.
The drug, semagacestat, was being developed in two ongoing long-term Phase 3 studies. "We are clearly disappointed by the results we are announcing today," said Eli Lilly Chairman and CEO John Lechleiter in a statement. "Pharmaceutical research always carries risk, as these results show."
Lilly said it will incur a third-quarter charge to earnings of approximately 3 cents to 4 cents per share because of Tuesday's decision. But the company confirmed its previous 2010 earnings-per-share guidance range of $4.50 to $4.65. Eli Lilly shares declined about 2.5% in Tuesday morning trading.
The drugmaker faces a patent cliff that some analyst call the worst in the industry. Its best-seller, the anti-psychotic Zyprexa, loses patent protection next year. Similarly, top-seller antidepressant Cymbalta also face the loss of patent protection. And last week, a judge ruled a patent protecting Lilly's attention deficit hyperactivity drug Strattera was invalid. The loss of patent protection exposes the drugs to cheaper generic competition.
It had been hoped that sales of semagacestat would help replace some of that lost revenue, and its ineffectiveness as an Alzheimer's treatment definitely hurts the company. But Lechleiter said Lilly has nearly 70 molecules currently in clinical development and that the company's progress doesn't rest on the success or failure of any single compound.
Many Attempts, Many Failures
With this setback, Lilly joins the long line of drugmakers that have run into a wall in the search for an Alzheimer's treatment. Just in March, Johnson & Johnson (JNJ) said it was delaying the release of results from a much anticipated Alzheimer's trial until 2012, and Medivation's (MDVN) and Pfizer's (PFE) late-stage trial for the Alzheimer's drug Dimebon failed to hit its efficacy goals. Bloomberg adds GlaxoSmithKline (GSK), AstraZeneca (AZN), Martek Biosciences (MATK), Abbott Laboratories (ABT), and Myriad Genetics (MYGN) to the list of companies announcing research setbacks in the past year.
"This is disappointing news for the millions of Alzheimer's patients and their families worldwide who anxiously await a successful treatment for this devastating illness," said Jan Lundberg, president of Lilly Research Laboratories, in a statement. "This is a setback, but Lilly's commitment to beating Alzheimer's will not waver."
Lilly said its decision does not affect solanezumab, the other compound it has in Phase III trials as a potential Alzheimer's treatment. Both drugs focus on the plaque buildup of amyloid-beta proteins in patients' brains. The plaque is believed to interfere with normal brain function. But the two molecules have different mechanisms of action, Lilly said.
Recently, however, a new theory has been developed that suggests the brain plaque has a protective role, rather than a destructive one, which would explain the failure of so many drugs that target it to have any positive impact on Alzheimer's.
In an interview with CNBC, Lechleiter, who said that there's really no treatment right now that slows the progression of the disease, promised to share the results with the scientific community so they can be studied, and further enhance the understanding of Alzheimer's.
Recently, pharmaceutical companies and government, research and patient groups founded a new database to share data on more than 4,000 Alzheimer's patients who have participated in 11 industry-sponsored clinical trials of failed drug candidates.
Alzheimer's disease is a progressive, incurable and fatal disease that destroys brain cells, causing memory loss and problems with thinking and behavior severe enough to affect all aspects of life. Roughly 6.5 million people in the U.S. are afflicted with Alzheimer's and Parkinson's diseases, with costs reaching as much as $175 billion annually, and the number of those afflicted is growing as the nation's population ages.
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