Big pharma takes financial risks to find a cure for Alzheimer’s Disease

Alzheimer's disease is rewriting the rules of drug discovery, with a handful of companies abandoning caution to keep pursuing an elusive hypothesis because the potential payoff is so great.

Even the merely forgetful, whose lives have yet to be derailed by the disease, have become candidates for clinical tests. Scanning the brain for telltale signs of Alzheimer's earlier - and ratcheting up drug dosage - may help turn failures into breakthroughs, said Andrea Pfeifer, CEO of AC Immune SA.

The Swiss company's partner on its experimental drug, pharmaceutical giant Roche Holding AG, said this week it will embark on a second advanced test, undeterred by a failed intermediate trial.

Pfeifer's optimism is a case study of the industry's unusually high risk tolerance on Alzheimer's, in which more than 100 experimental drugs already have failed - with two recent setbacks from Merck and Eli Lilly. Like Roche and its partner, Biogen is chipping away at the same target that has eluded rivals.

Merck and Lilly have opted to keep testing their medicines in patients showing only hints of the degenerative disease. Each advanced trial can cost hundreds of millions of dollars, according to Lilly.

'It's always a question - are you throwing good money after bad?” said Birgit Kulhoff, a fund manager for Rahn & Bodmer in Zurich. 'If you were to be successful, it would be an extremely big market.”

Drugs that halt the progress of Alzheimer's disease could be a market worth as much as $30 billion in the United States alone, Sanford C. Bernstein analysts estimate.

Cancer is the only other disease for which companies are this willing to look deep into a failed study for a positive trend to chase, Kulhoff said. Alzheimer's tests probably are more expensive because researchers follow patients for longer and monitor them closely.

The drugmakers wouldn't disclose how much they have spent on clinical tests. A final-stage trial in Alzheimer's disease can cost north of $200 million, according to Eric Schmidt, an analyst with Cowen.

Such a study in a cancer such as melanoma would tend to be much smaller and could cost about $50 million to $100 million, he said.

Just arranging and administering the brain scans needed to make sure people have signs of the disease cost about $15,000 to $20,000 per person in a small test, according to AC Immune.

Roche made its cost-benefit calculation two and a half years ago. Crenezumab, the medicine it's working on with AC Immune, had failed to help patients think more clearly or retrieve memories in a mid-stage trial, a hurdle potential drugs usually must clear before they go into the last, largest and most expensive stage of clinical studies.

Instead of abandoning the compound, Roche looked at a trend toward benefit in the least sick patients and spent the next two years figuring out how high it could safely ratchet up the dose. Then last year, it started another 750-patient study, with results expected in 2021.

Now it's embarking on a separate trial, also with 750 patients with a very mild form of the disease. It's unclear how that test will differ from the first one.

It's also trying a higher dose for another Alzheimer's compound, gantenerumab, after a late-stage trial failure.

Both Roche drugs are aimed at protein pieces called beta amyloid that clump together in the brain and are thought to play a role in triggering the disease. Trouble is, so did the Lilly medicine that failed a test in patients last year.

Last month's unsuccessful trial from Merck also centered on beta amyloid as a target, although the type of medicine was thought to prevent the substance from forming. Those failures have cast doubt on the whole approach.

'Clearly those are two strikes against that theory,” Brent Saunders, CEO of U.S. specialty-drug maker Allergan PLC, said in New York last week. 'My hope is that we'll keep going, but we'll see.”

Allergan is thinking hard before starting patient trials on an experimental drug that belongs to the same family of drugs as Merck's after seeing the two recent failures, according to Saunders. The company also sells medicines that temporarily ease symptoms of the disease - the sole form of treatment currently available.

Alzheimer's disease is on the rise across wealthy countries as their populations age. Dementia worldwide unseated AIDS as one of the top 10 killers in the World Health Organization's latest rankings.

'We're not going to have a reversible cure any time in the near future,” said Phyllis Ferrell, who leads Lilly's Alzheimer's program. Still, 'I think in our lifetime we will have something that slows this disease.”