Pharmaceutical Goliath Eli Lilly and Company (NYSE:LLY) is scheduled to update the world on its progress in slowing the ever-worsening effects of Alzheimer's disease at a key industry conference tomorrow.
Innovating care in a tough-to-treat indication
In its presentation on Wednesday, the company will unveil data showing whether or not solanezumab can halt Alzheimer's disease progression in patients suffering from a mild form of the disease.
If so, then it would mark a major advance in an indication where failure has been far more common than success.
Historically, more than 99% of all Alzheimer's disease drugs have failed during human clinical trials, leaving doctors and patients with only a handful of therapies to choose from, all of which target the symptoms rather than the cause of the disease.
Although the cause of Alzheimer's disease isn't fully understood, an unnatural buildup of amyloid plaques that interrupt communication in the brain are associated with a worsening of Alzheimer's symptoms, and that has Eli Lilly thinking that solanezumab, which binds to and destroys those plagues, could be effective -- at least for patients suffering from a less advanced case of the disease.
Optimism surrounding solanezumab stems from a retrospective analysis of a failed phase 3 trial in which solanezumab modestly slowed disease progression in patients with mild cases of the disease, but failed to slow progression in more advanced cases. That finding prompted the company to continue studying patients diagnosed with a mild form of Alzheimer's disease for an additional two years, the results of which will be discussed tomorrow.
If Eli Lilly reports positive data from its two year extension trial, then it could indicate that its ongoing phase 3 trial in mild Alzheimer's disease patients will also bear fruit. If it does, then Eli Lilly could be positioned to file for solanezumab's approval; however, such an approval could still be years away given that this other study isn't expected to wrap up until 2016.
A big market opportunity
There's a significant and growing need for new therapies that can curtail the devastating effects of Alzheimer's disease. An estimated 5 million Americans are diagnosed with Alzheimer's disease, and that figure is expected to surge to 13.8 million by 2050.
The sheer size of the addressable patient population means that there's a big opportunity for Eli Lilly and its counterparts to innovate new treatment.
Just how big the market could be for drugs like solanezumab isn't certain, but widely-prescribed Alzheimer's disease drugs Aricept and Namenda are both top sellers. Prior to losing patent protection, Aricept was producing sales of roughly $2 billion, and in the first quarter, Namenda sales totaled $396 million.
Further, According to the Alzheimer's Association, Alzheimer's disease-related spending already eclipses $226 billion annually, and that spending is forecast to increase to more than $1 trillion over the next 35 years. Ostensibly, a lot of that spending could head to drugs like solanezumab -- if successful.
Investors should recognize that there's a substantial risk associated with solanezumab. The drug's benefit in mild Alzheimer's disease was modest, and in prior trials its effect on patients with moderate cases of Alzheimer's disease were statistically insignificant. Additionally, investors should also bear in mind that a number of other companies, including Biogen, are developing their own variations of solanezumab that work similarly. If those competing drugs succeed, they could dampen solanezumab's market potential. Regardless, since this drug could help millions of patients retain their mental ability longer, Eli Lilly's report tomorrow rates must-watch status.
Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned.The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.