Developing a successful treatment for Alzheimer's is acknowledged as one of the biggest bets a drugmaker can make. So it probably does not come as a surprise that Pfizer and Eli Lilly are not generating tremendous hope among institutional investors. A survey finds that most doubt their medications will hit their primary endpoints in Phase III studies that are expected to be reported this summer.
On average, just 14 percent gave Lilly's solanezumab a chance of meeting the study goals, compared with an average 21 percent probability for Pfizer's bapineuzumab, according to the survey of 146 institutional investors by ISI Group analyst Mark Schoenebaum. As for FDA approval, the Lilly drug generated 15 percent probability, on average, of winning agency endorsement, while the Pfizer drug notched 29 percent.
"These drugs are long shot, lottery tickets," one investor responded in the survey. Another wrote "Not playing. A fool's game. I have no confidence that we are anywhere near the technology to address the disease. I think all Alzheimer pharma stocks go down a bit and the rest of pharma is insulated from the story." One more sentiment: "It's too critical not to be there - risk/reward for the pharma group is still skewed to the upside."
While the showing may not reflect a great deal of confidence, study results that exceed expectations could, presumably, translate into huge sales, given the dearth of treatments that can slow progression of the disease. Both drugmakers are expected to disclose the main findings from their clinical trials in the third quarter and complete study data is expected to be presented at medical meetings later this year.
Lilly tested solanezumab in 12-week mid-stage trials before moving the drug into larger Phase III studies. Pfizer, however, ran 18-month-long mid-stage trials for bapineuzumab, which meant the drugmaker was in a better position to fine tune dosing, Reuters note, adding this may offer an advantage and account for some of the added confidence in bapineuzumab that was seen in the ISI poll.
For Lilly, a successful Alzheimer's medicine would go a long way toward compensating for the loss of patent protection for its Zyprexa schizophrenia drug, among others. Similarly, Pfizer needs a new blockbuster now that generic versions of its Lipitor cholesterol pill are available. The Pfizer drug, by the way, is the result of a joint effort with Elan and Johnson & Johnson.
What would happen to Lilly stock, though, if trial results are disappointing? Shares would likely drop to $37.40, according to the average estimate in the survey, which would be a 12 percent drop from the closing price yesterday. As for Pfizer, investors predict its stock would fall to $21.30, which would represent a 6 percent drop from the closing price yesterday. And Elan shares would hit $9.80, a 30 percent drop from yesterday's close of $13.87.
brain pic thx to tocaboca on flickr