Eli Lilly gambled big on Alzheimer’s R&D and now endures the consequences. The company is slashing almost 500 jobs after its lead Alzheimer’s drug solanezumab failed in phase III at the end of last year. The company’s optimism had led to a heavily ramped up sales and marketing organization, which now is being slashed, and some more. This once again shows the risks of Alzheimer’s R&D and the challenges of managing it as a viable business opportunity. The company can’t be blamed for not having tried, going the whole nine yards even modifying its primary endpoint by replacing the previous co-primary cognition and function endpoint to a single assessment of cognition.

Alzheimer’s disease has the worst statistics for drug development: only one out of 244 drugs was approved for the indication in the period between 2002 and 2012. The last approved drug for Alzheimer’s, in 2014, was a combination of two already existing drugs. So what are some of the challenges with drug development for the treatment of Alzheimer’s?

  • Firstly, there is not yet a clear understanding on what drives the disease and there are largely two hypotheses, the beta-amyloid and the tau hypotheses. However, there seems to be more at play than just one of these, and it wouldn’t be surprising if the disease is highly multi-factorial and we are still missing (a) part(s) of the puzzle. 
  • Secondly, patients develop Alzheimer’s over a period of 5-10, sometimes even 20 years, which makes clinical trial design complicated with the requirement of larger, longer and more stringent clinical studies. Also, Alzheimer’s studies were even more challenging in the past as it was difficult to be sure of the Alzheimer diagnosis and the stage of the disease. New imaging technologies allow for better screening and diagnosis, making inclusion into studies more accurate and hence chances of trial success larger.
  • One does not yet quite understand enough about the pathophysiology of Alzheimer’s disease. Two main hypotheses have been discussed for years, the Beta-amyloid (plaques) and the Tau (neurofibrillary) hypothesis, after the main factors thought to be involved in the development of the disease. Researchers are so passionate about these hypotheses that it sometimes hampers collaboration between the two teams. Looking at other fields of medicine, likely all is not as straight forward, both teams may hold part of the truth and other factors almost certainly will be (as) important.

With so many unknowns, why invest in Alzheimer’s R&D? The Alzheimer’s market is huge already, and with people living longer, we expect to see a huge increase in number of patients with Alzheimer’s. However, the company with the first Alzheimer’s drug to actually slow progression and not only treat the symptoms will almost certainly be sitting on a mega-blockbuster. A number of companies are now increasingly focusing on developing treatment, but failures like Lilly’s are not making this an easy rise for (big) pharma. Let’s hope for the whole biopharma ecosystem to pitch in here!


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Arctic Aurora LifeScience is an equity fund investing in global biotechnology and pharmaceutical companies. The fund is run by former portfolio manager in the Swedish AP Fonder, Ulrica Bjerke, and Dr. Torbjørn Bjerke, both with 20 years of experience from the market. Arctic Aurora LifeScience was launched in May 2016 with both hedged and un-hedged share classes.

Past performance in Arctic Aurora LifeScience s no guarantee for future returns. Future returns depend on the market, fund manager skill, fund risk level, costs, among others. Performance in the fund may at times be negative and may for this fund vary considerably within periods.