Eli Lilly's (NYSE: LLY) 2010 purchase of Avid Radiopharmaceuticals is about to start paying off. After a rejection last year, the Food and Drug Administration approved Amyvid, a dye for detecting beta-amyloid plaques in Alzheimer's disease patients.

Amyvid is more of a process-of-elimination test; it can't actually diagnose Alzheimer's disease because plaques are seen in patients with other types of neurologic conditions and in older people with normal cognition. The lack of plaques, on the other hand, is an indication that a patient doesn't have Alzheimer's pathology. Before Amyvid's approval, the only way to diagnose the presence of plaques was through an autopsy, which is a little late for the patient.

Lilly claims 20% of patients diagnosed with Alzheimer's through cognitive tests don't have the pathology upon autopsy, which kind of makes you wonder whether those patients don't have Alzheimer's, which would make Amyvid useful, or whether the pathologic definition needs tweaking. There's been a long-standing scientific debate whether the plaques are really a cause of Alzheimer's disease.

Given the debate and the fact that having a diagnosis doesn't really help a patient get better -- if it did, Lilly would be able to charge more because it would save insurance companies money -- I don't expect Amyvid to be a massive blockbuster. The test could, however, be of great help to drugmakers developing Alzheimer's drugs if it can help exclude from the clinical trials patients who don't have Alzheimer's and therefore wouldn't be helped by the drug candidate.

Amyvid is too late to help Eli Lilly's solanezumab and bapineuzumab -- being developed by Pfizer (NYSE: PFE), Johnson & Johnson (NYSE: JNJ), and Elan (NYSE: ELN) -- which are both scheduled to read out phase 3 data shortly. If the drugs fail, though, it might be possible to go back and do a small trial using Amyvid to see whether the drugs are able to reduce or eliminate plaques in patients with Alzheimer's. Both drugs are designed to attack the protein that forms the plaques.

Ironically, Amyvid could ultimately contribute to its own demise. If drugs are able to clear plaques, but that doesn't help patients, it would lend credence to the hypothesis that the plaques are just a byproduct of the disease and would make Amyvid less useful.

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