Lilly aims potential Alzheimer’s drug at early patients

Eli Lilly and Co. said it will test its experimental Alzheimer’s drug in patients with early stages of the disease after the medicine failed to slow the condition in more advanced patients.

The trial of 2,100 patients, called Expedition III, will use new measures of cognitive function, such as the ability to do tasks like cooking or driving, or remembering words after a delay. It’s meant as a more-targeted, more-sensitive trial than two earlier ones that had a wider range of patients, said Eric Siemers, a senior medical director at Indianapolis-based Lilly.

Lilly is pushing ahead with the drug, called solanezumab, in an effort to gain the first medicine approved that treats Alzheimer’s causes rather than just the symptoms. The therapy targets the buildup of plaque known as beta amyloid in the brain that’s thought to be a basis of Alzheimer’s. Clearing or preventing it may help slow or halt progression of the disease, though that theory hasn’t been proven.

“Since we saw the signal in the mild patients,” in the earlier trials, “we’re restricting the patient population,” Siemers said in an interview. The trial should take about 22 months to complete, he said in a conference call Friday.

The company will also use new tests for biological signs of the disease to help enroll patients and see whether their illness is advancing.

By testing people for evidence of the brain plaques that are thought to be a cause of Alzheimer’s, Siemers said the company can avoid accidentally enrolling patients who have some other form of cognitive impairment and wouldn’t be affected by solanezumab.

More accurate

“The technology wasn’t available to test during Expedition I and II, but now we can for every patient going into the trial,” Siemers said. “It’s just better medicine, we have a more accurate diagnosis and a treatment that targets it.”

More than 5 million Americans have Alzheimer’s, the most common form of dementia, and the number is expected to surge to as many as 16 million by 2050 as the population ages, according to the Alzheimer’s Association. No drugs currently on the market have been shown to slow progression of the disease.

The market for medicines may be worth $20 billion annually, Deutsche Bank estimated last year. Merck & Co., Novartis AG, Roche AG and other large drugmakers are pursuing treatments. A final-stage trial of bapineuzumab, a drug developed jointly by Pfizer Inc., Johnson & Johnson and Elan Corp., failed last year after it didn’t show a benefit.

Beta amyloid

Lilly and other drugmakers have struggled to show that success in affecting beta amyloid translates into clinical improvement in patients. It’s possible that the patients in previous trials were treated too late, after damage from the disease was already done. Or it could be that beta amyloid is the wrong target. Sanofi, the Paris-based drugmaker, has said it won’t start developing an Alzheimer’s treatment until more is known about the causes of the disease.

Lilly said in December that it planned to go ahead with a third Phase III trial of the drug, after two other final-stage trials showed that solanezumab slowed progression of the disease in people with a mild form of the disease. Drugs typically require three stages of testing before approval. In an analysis of the first two Phase III trials, solanezumab slowed memory loss and cognitive decline by about 30 percent in early-stage patients, researchers said.

“Clinicians feel that’s clinically meaningful,” Siemers said. “That’s an effect we think would be worthwhile in clinical practice.”

Expedition III will be run in 11 countries, with about two-thirds of the patients in the United States. The rest will be in Japan, Australia and Europe, Siemers said.

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Lilly drug for Alzheimer's gets limited Medicare coverage

Medicare will pay the costs of brain imaging that uses a Eli Lilly and Co. drug to help diagnose Alzheimer’s disease only for patients participating in approved clinical studies, regulators proposed.

But Lilly officials said they will push ahead with the first-of-a-kind imaging chemical, despite the mostly negative ruling by Medicare officials.

There isn’t enough evidence to show the scan will benefit all people with dementia, though in some cases it may help diagnose whether a patient has Alzheimer’s, the most common form of dementia, the Centers for Medicare & Medicaid Services said last week in its proposed coverage decision.

The decision had been eagerly anticipated by the industry. Lilly says the drug should help reduce misdiagnosis of the disease.

Medicare, the U.S. health plan for the elderly and disabled, will reimburse patients for a scan if they are part of an approved clinical trial for the prevention, treatment or better diagnosis of Alzheimer’s, the agency said.

The $3,000 test, approved last year by the U.S. Food and Drug Administration, uses Lilly’s Amyvid imaging agent to trace a brain protein linked to Alzheimer’s. The disease affects 5 million Americans, a number that patient advocates say may double by 2050. In younger patients or those where the diagnosis is unclear, the benefit of the scan may be greatest, scientists have said.

In its proposed decision, the agency set out criteria for clinical studies that would allow Medicare recipients to be covered for the costs of the brain scans, including whether using the test would spare unnecessary treatments or improve the patients’ quality of life.

The ruling is an unexpected setback for the product after European Union regulators endorsed the chemical in January. The U.S. Food and Drug Administration approved the drug for sale in 2011.

"Lilly remains steadfast in our request for Medicare coverage of beta-amyloid imaging agents for the appropriate patient population," said Wei-Li Shao, director of the company's Alzheimer's business, in a statement.

Eli Lilly and Co. paid $300 million in 2010 to acquire the drug and its developer, Avid Radiopharmaceuticals Inc.

Avid Radiopharmaceuticals CEO Daniel Skovronsky said in a statement the Medicare ruling "may stifle future innovation aimed at improving diagnosis."

Doctors currently diagnose Alzheimer's disease by observing patients and administering physical and mental tests. The disease is the sixth-leading cause of death in the U.S. and the most common form of dementia, a term for brain disorders that affect memory, judgment and other mental functions.

Alzheimer's attacks neurons in the brain, leading to problems with memory, thinking and behavior. There is no cure for the disease, and scientists are not even sure what causes it.

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Lilly freezes pay for workers, executives

Eli Lilly and Co. will freeze pay this year for most workers, including executives, a spokesman said Wednesday.

The pay freeze will save $400 million through 2016, said Ed Sagebiel, a spokesman for the Indianapolis-based company. Lilly won’t give pay raises to executives, supervisors or most workers. Some bonuses will also be reduced. The company had 38,350 workers in 2012, according to data compiled by Bloomberg.

The drugmaker is reducing expenses and counting on experimental Alzheimer’s and diabetes drugs to revive growth as it loses revenue from top products to generic competitors. Cymbalta, a depression pill that at $5 billion a year is the drugmaker’s biggest seller, loses patent protection in December. Zyprexa, an anti-psychotic, had peak sales of $5.03 billion in 2010, the year before it lost patent protection.

“This is a difficult, but necessary decision,” Sagebiel said in an e-mail. “While we remain confident in our future, we continue to face the most significant challenges in our history.

Lilly expects a 20-percent reduction in revenue in 2014 because of the expiration of the Cymbalta and Evista patents in the U.S., he said. Evista, used in the treatment of osteoporosis as well as breast cancer, loses protection next year. It generated more than $1 billion in 2012.

‘‘This action is necessary to withstand the impact of upcoming patent expirations and to support the launch of our large phase III pipeline,’’ CEO John Lechleiter, 59, said in a letter to employees Wednesday, a copy of which was obtained by Bloomberg. ‘‘The current situation requires us to take the appropriate action now to secure our company’s future. We can’t allow ourselves to let up and fail to make the tough choices.”

Lechleiter hasn’t received a pay raise since 2010, according to data compiled by Bloomberg.

The company is scheduled to report second-quarter earnings on July 24.

Lilly shares fell less than 1 percent Wednesday, to $50.67 each, at the close of trading. The company has gained 2.7 percent this year, compared with a 21-percent increase in the Standard & Poor’s 500 Pharmaceuticals Index of 13 drugmakers.

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Lilly's Lechleiter back at helm after health scare

Eli Lilly and Co. Chairman and CEO John Lechleiter is back to full-time work after taking a leave in May to have surgery for a dilated aorta, the company announced Monday morning.

The Indianapolis drugmaker said both a company doctor and Lechleiter's personal physician have cleared the 59-year-old to return.

Lechleiter had the surgery May 13. Chief Financial Officer Derica Rice served as acting CEO for the Indianapolis-based drug company during Lechleiter's leave, and independent director Ellen Marram served as acting chairwoman.

Lechleiter was expected to make a full recovery from the surgery. The aorta is the largest blood vessel in the body, and Lechleiter's condition was discovered during unrelated testing. The executive had not experienced any symptoms.

Lilly shares rose 29 cents, to $50.87 each, in premarket trading Monday.

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Lilly shares rise after drugmaker reports solid second quarter

Eli Lilly and Co. shares jumped 2.6 percent Wednesday morning after the drug maker reported better-than-expect results for the second quarter.

Strong sales and penny-pinching helped Lilly beat Wall Street’s expectations in the quarter, leading the company to raise its profit forecast for the year.

The Indianapolis-based drugmaker reported earnings of $1.2 billion in the three months ended June 30, an increase of 31 percent compared with same quarter last year. Earnings per share totaled $1.11, compared with 83 cents a year ago.

Excluding a restructuring charge of $63.5 million from the closing of a plant in Germany, Lilly would have earned $1.16 per share. On that basis, analysts were expecting earnings of $1 per share, according to a survey by Thomson Financial.

Because it outperformed those expectations, Lilly hiked up its profit expectations for the year by a range of 13 cent to 18 cents per share. The company now expects to earn between $4.28 and $4.38 for the year.

In the second quarter, Lilly was able to boost its sales 6 percent worldwide to $5.9 billion. Analysts were expecting revenue of $5.82 billion.

"Continued operating and financial discipline, along with a maturing pipeline of potential new medicines, gives me great confidence in the company's ability to meet the challenges we face from upcoming patent expirations and to resume growth after 2014,” Lilly CEO John Lechleiter said in a prepared statement.

Lechleiter took a leave of absence on May 13 to have surgery on a dilated aoarta. He returned on July 8.

 “It looks like they were doing some pretty good work while I was gone,” Lechleiter said.

Lilly’s bestselling drug, the antidepressant Cymbalta, is set to lose its U.S. patent protection in December, after which its sales will switch to cheaper generics. Sales of Cymbalta grew 22 percent in the second quarter, to nearly $1.5 billion.

Lilly already lost patent protection on its former bestseller, the antipsychotic Zyprexa, in late 2011. And Lilly also will lose patent protection on Evista, an osteoporosis drug, next year. Lilly is hoping to win approval on new diabetes and cancer drugs to offset those coming hits to its sales.

The company has cut costs to help fund its drive for new drugs, and last week said it would freeze wages for most of its workers.

“Management appears to be showing prudent cost discipline in anticipation of the Cymbalta patent cliff,” Mark Schoenebaum, an analyst with International Strategy & Investment Group in New York said in a report. “Smart expense control should increase the street’s confidence that Lilly is serious about dramatically improving operating margins post-2014.”

Lilly expects a 20-percent reduction in revenue in 2014 because of the U.S. expiration of the Cymbalta and Evista patents, a company spokesman said July 17. Lilly had hoped to avoid more cost cuts in the medium term, Lechleiter said.

“We’re losing a lot of revenue when at the same time we’ve got to launch our phase III products,” he said.

“You don’t take these actions lightly. This is the second such announcement in three years,” Lechleiter said of the wage freeze.

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Lilly lung cancer drug raises patient survival in trial

Eli Lilly and Co.’s experimental lung cancer medicine increased survival among patients compared with those on chemotherapy alone.

Shares in the Indianapolis-based drugmaker rose as much as 5.5 percent Tuesday morning after the announcement.

The drug, called necitumumab, met the primary endpoint of increasing overall survival in a trial involving 1,093 patients with non-small cell lung cancer whose disease had spread, the company said in a statement. Necitumumab was tested in patients with a type of tumor known as squamous cell carcinoma.

If approved, the drug would be a potent boost to Lilly’s product portfolio. It would also mean a critical new therapy for a cancer that’s proven difficult to treat with drugs such as Avastin that directly target tumors, as opposed to more broadly active chemotherapy drugs.

“This is a clear upside surprise,” Mark Schoenebaum, an analyst with ISI Group LLC, said in a note to clients.

Next year, Lilly plans to release full results from the study at a scientific meeting and anticipates submitting it to regulatory authorities. Non-small cell lung cancer accounts for about 85 percent of lung cancer, and patients with squamous cell carcinoma make up about 30 percent of those patients. Lung cancer is the leading cause of cancer death in the U.S.

“If apprved, necitumumab could be the first biologic therapy indicated to treat patients with squamous lung cancer,” Richard Gaynor, vice president, product development and medical affairs for Lilly Oncology, said in a prepared statement.

Lilly shares were up 4.4 percent, to $55.93 each at 10:46 a.m. The shares have gained 26 percent in the last 12 months as of Monday’s close.

Analysts had “basically zero” expectations for necitumumab, Schoenebaum said in his note. The drug failed in a prior non-squamous lung cancer trial, he said.

“We really need to see the full data to understand risk/benefit,” Schoenebaum said.

The most common adverse events seen in the study included rash. Less frequent, yet serious, side effects included blood clotting, Lilly said.

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Marian's med school quest was leap of faith

When the Marian University College of Osteopathic Medicine opens next month, it will complete one of the least likely success stories in higher education.

Marian, a small Catholic college started by Franciscan nuns, will launch just the second medical school in Indiana, joining the 110-year-old, state-supported Indiana University School of Medicine.

Elsener

Marian President Dan Elsener is credited with pulling off the audacious move with a mix of big dreaming, careful planning, deft networking—especially among Indianapolis’ most prominent Catholic business executives—and “don’t take no for an answer” fundraising. He also enjoyed some good luck or, as Elsener would call it, divine providence.

“When Dan broached this idea a few years ago, a few of us scratched our heads and said, ‘You know, this isn’t just a new academic program,’” said John Lechleiter, CEO of Eli Lilly and Co., one of several well-known contributors to the new school. “But I learned to never underestimate Dan Elsener. Dan said then, as he often says, ‘Have faith.’”

Marian has raised $100 million so far to launch its medical school, which will welcome 162 students on Aug. 12. The school intends to grow to 600 students—about half as many as the IU medical school enrolls.

About 30 percent of those funds have come from Indiana’s leading health care institutions, including Eli Lilly and Co., Roche Diagnostics Corp., Hill-Rom Holdings Inc., St. Vincent Health, Community Health Network and the Suburban Health Organization.

Caponi

But the rest has flowed from 250 individual donors, which include Lechleiter and his wife, Sarah; former St. Vincent Health CEO Vince Caponi; and AIT Laboratories founder Michael Evans—who kicked off the medical school fundraising with a $30 million gift and later raised it to $48 million.

“Who would have thought Marian would be the next medical school in Indiana?” said Angela White, CEO of Johnson Grossnickle & Associates, a Greenwood-based fundraising consultancy. The firm has advised Marian in the past, but did not work on this project.

White said $100 million fundraising campaigns by small private schools are rare. But she said they’re possible when two key things come together: “dynamic leadership, like in the president, and transformational projects, when you are dreaming big.”

‘Up a weight class’

Marian’s dreaming began in 2001 when board members sought the blessing of local philanthropist Christel DeHaan to recruit away Elsener, who was then executive director of her foundation and education-lobbying organization.

Marian was struggling at the time, with about 1,300 students, most of whom pursued careers as nurses, teachers, social workers or lay religious leaders. The school was threatened by bankruptcy—a dire outcome it averted by completing its largest fundraising campaign to date, $8 million.

DeHaan, who went to high school at a Franciscan convent in her native Germany, gave not only her blessing, but also money, to fund a study of other universities that had once been struggling but were now thriving.

After evaluating the study, Marian drew this conclusion: Successful turnarounds happened when universities focused their existing strengths on the most compelling needs in the communities around them.

Lechleiter

Two years later, Elsener began to think a medical school might fit that bill. The school had a long history of training nurses and other health care workers. The state and city were placing special emphasis on growing the health care and life sciences industries here. And around Indiana, 57 of 92 counties suffer from a shortage of doctors.

But Elsener had lots more work to do before he had a prayer of convincing anyone that Marian could be the institution to meet that need.

“To say that we were fighting up a weight class is an understatement,” Elsener said. “It’s like going from peewee football to the NFL the next year.”

Local real estate developer Michael Browning, a longtime supporter of Marian who has been vice chairman of its overall fundraising committee, lent Elsener his plane to visit other Catholic universities with medical schools, such as Creighton University in Nebraska.

Elsener also started looking at osteopathic medical schools, none of which were at Catholic universities, because it had long been known that the Indiana Osteopathic Association wanted to start a school here.

Osteopathic schools are similar to but less common than allopathic schools, such as the IU medical school, which tend to turn out more specialists. Because osteopathic schools graduate larger numbers of primary care physicians, going the osteopathic route seemed a good way to address Indiana’s doctor shortage, which is mainly a shortage of primary care doctors.

In the midst of this planning, Elsener started attending a men’s Bible study with a handful of other Catholic executives. One of them was Caponi, CEO of the St. Vincent hospital system.

At one of the Bible studies in 2007, Elsener told Caponi about his medical school idea.

“You really need to do this,” Caponi told Elsener, noting that the IU medical school was doing great work turning out specialists, but was not producing enough primary care physicians. And, Caponi said, “I think the opportunity [for Marian] is to produce a physician that’s acutely aware of the needs of the poor and underserved, to take care of patients mentally, physically, but also spiritually.”

Caponi’s support was critical because Marian needed to establish close relationships with hospital systems, so it could arrange practical experiences for its students’ third and fourth years of medical school, as well as for the residency training they must do after graduation.

Caponi would go on to recommend that St. Vincent Health donate $5 million to the school, which it did. And he gave personally as well, although he declined to say how much.

But even more significantly, Caponi’s early support gave the medical school credibility with other donors and health care partners.

‘I want to be part of it’

Evans

In 2009, Elsener approached Bryan Mills, the recently appointed CEO of Community Health Network, who was so supportive he “didn’t even flinch,” Elsener said. Community donated $5 million to the medical school and committed to help train Marian’s med students.

Elsener’s big break came that same year when a member of Marian’s fundraising staff paid a visit to Michael Evans. Evans was in the process of selling his company, AIT Laboratories, to the company’s employees for a whopping $90 million.

The fundraising officer arranged a meeting between Evans and Elsener, who had never met.

Instead of asking for money, Elsener posed a few questions about osteopathic medicine, and how it was perceived in the medical field. As an allopathic doctor himself, and a former professor at the IU medical school, Evans was in a position to know.

In late 2009, Elsener invited Evans to lunch at his office in Allison Mansion, the former estate of auto entrepreneur James Allison, which serves as Marian’s administration building.

At that meeting, Elsener told Evans he soon would make a presentation to the Indiana Osteopathic Association to start a medical school. And Marian needed a major funding source to convince the association the university had the means to do it.

A few days later, Elsener got a text message from his assistant, with a letter from Evans attached. It pledged support of $30 million. Elsener called his assistant, Cyndi Kamp, to verify that he was reading the number correctly.

Michael Evans' $30 million donation helped launch the state's second medical school. (IBJ photo/ Aaron P. Bernstein)

“I really had no connection with Marian. But I found that Dan really had a passion for this. I had a connection with him,” said Evans, who as a young man trained for a year to be a priest before deciding on a science career.

“You’re really not pledging to a particular school of medicine,” he added. “You’re pledging to a person who you believe will make that happen.”

After the sale, AIT fell on hard times as the federal Medicare program sharply reduced payments for the blood and urine tests the company performs for patients taking narcotic painkillers.

Because Evans is still owed tens of millions of dollars from the sale, that has cast some doubt over his ability to pay the remaining $38 million of his $48 million gift. But he expressed confidence he’ll be able to do so.

Evans did extend the payment schedule from seven to 10 years. He’s also provided detailed financial information to the university to assuage any concerns.

But he’s encouraged that AIT is on the rebound. And even if the company falters again, Evans noted, he personally owns the three office buildings out of which his businesses operate, and those alone are worth more than $24 million.

All told, Marian has $40 million in hand to fund its medical school, with the rest of the $100 million pledged to be paid over time.

The support of the hospitals, combined with the gift from Evans, gave Elsener the momentum he needed. Soon after, donations started flowing in.

“The thing that got this going was Mike Evans’ phenomenal gift. Then people started saying, ‘I like the idea and I think it’s going to happen and I want to be part of it,’” Lechleiter said.

Lechleiter’s connection to Marian came through his wife, Sarah, who was asked to sit on an advisory group shortly after Elsener became president. The couple has been supporting the school ever since, with contributions to the medical school just one part.

John Lechleiter declined to say how much he and his wife gave, but he said their support for Marian is roughly on par with their gifts to the United Way of Central Indiana, which totaled $1 million in 2009. In addition, the Eli Lilly and Company Foundation gave $1 million to the medical school.

Marian isn’t done raising money. Elsener said the university needs another $50 million to $60 million to completely fund a full house of 600 students. And there will be more fundraising after that.

But Elsener thinks the clear need for physicians serving poor and rural communities will keep the necessary funds flowing in.

Donors “can see that they can give and give large gifts and give joyfully,” he said, “because they can see the significant impact of their gift.”•

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