The industry's eyes were on solanezumab. The Alzheimer's disease drug from Eli Lilly & Co. had been under investigation for more than a decade; any chance of it having a future relied on a strong performance in the latest round of Phase 3 testing. A positive readout would prime the drug for approval, in turn adding another option to the scarce list of treatments for the disease and buttressing the potential for other Alzheimer’s medications that worked in similar ways.
But it failed. Solazenumab didn't significantly outperform a placebo in treating mild dementia in Alzheimer's patients. The drug missed its primary endpoint in late-stage testing before, but this newest setback was the most disheartening, and served to shelve the treatment indefinitely.
Though the company said it planned to continue the hunt for effective Alzheimer's treatments with other candidates, what will come next for its neuroscience business remains on many stakeholders' minds.
In the nearly three months since solanezumab's failure, Lilly has pushed deeper into neurology, inking deals to strengthen its current offerings and branch into new disease areas. According to company executives and industry followers, continued innovation should support Lilly becoming a major player in the space.
A promising therapeutic area
In the vast and varied galaxy of central nervous system (CNS) treatments lies neurology drugs. Like the worlds of a complex solar system, the illnesses the drugs target are strange and idiosyncratic. They include Alzheimer's, Huntington's and Parkinson's diseases, multiple sclerosis, sleep disorders and an array of pain conditions.
Many of those diseases are hard to treat, which has spurred drug companies to add promising compounds to their pipelines. Aging populations more susceptible to certain brain diseases, arthritic pain and degenerative illnesses are also contributing. A 2015 report from Global Industry Analysts projected the worldwide CNS market will hit $129 billion by 2020, while another from IMS Health found CNS drugs make up 12% of the global drug pipeline.
That positive outlook has extended to specific therapeutic areas as well. The neurodegenerative drug market is slated to reach $45 billion by 2022. Pain medications, though in a more competitive space, can be highly lucrative as well, with some estimates putting branded opioid revenues at more than $6.6 billion by 2020.
Pain is particularly interesting to Lilly. While the company is working to strengthen its neuroscience portfolio, it has three main drugs on the market: antidepressant Cymbalta, attention deficit hyperactivity disorder drug Strattera and antipsychotic Zyprexa. Collectively, these treatments brought in 93% of the neuroscience business's nearly $709 million in revenues during the third quarter.
"One of the things we've always had on the plate has been pain," Rob Conley, a distinguished Lilly scholar, said in an interview. "Now that said, we weren't really ever interested in becoming what I'll say is a marketer of more traditional pain medications like repurposed opioids or non-steroidal anti-inflammatories, but we were looking for more innovative things."
That innovation has materialized in two late-stage migraine drugs, galcanezumab and lasmiditan, and a late-stage cancer pain medication, tanezumab.
Lilly is developing tanezumab through a partnership with Pfizer, but its migraine pipeline stems completely from bringing candidates back home.
The company was the original developer of galcanezumab and lasmiditan, but licensed them out to Arteaus Therapeutics and CoLucid Pharmaceuticals, respectively, back when pain wasn't as central of a focus for the company. Following positive clinical results, Lilly reclaimed full ownership of galcanezumab in 2014 and took over CoLucid earlier this month.
And it's not ruling out further deals for headache drugs.
"We've been very clear as a company that external innovation is an important part of our innovation strategy," said Bill Ratner, senior director of marketing for Lilly's global headache and pain business. "Even with the case of [galcanezumab] and lasmiditan, it was a mix of internal and external, really."
"Our intent is not to make this a one-and-done," Conley said of the CoLucid acquisition, "but to really have an ongoing franchise."
Ratner and Conley said Lilly is more interested in therapies for chronic pain rather than acute pain and treatments that don't rely on opioids, though they didn’t name specific businesses or drugs that would be on the company's radar for future neurology deals.
Credit Suisse analyst Vamil Divan said a large transaction – something with a price tag of more than a couple billion – isn't likely given Lilly's M&A history. Its largest deal to date came in 2009, when it acquired oncology company ImClone Systems for $6.5 billion.
Lilly isn't putting all its chips on pain and migraine, though. The company has a handful of drugs running across all clinical trials that target Alzheimer's and other neurological diseases, including CNS disorder, dementia and schizophrenia.
"This isn't in any way shape or form us moving away from our commitment to neurodegeneration," Conley said. "We unfortunately had two major phase 3 failures there … but we're still there. We're not going to be there – in approved drugs – in the next few years, but it's not for the lack of trying. And that trying is still going to go on."
"We're an innovation company, and we follow the innovation where it comes from and sometimes you can't predict that," Ratner added. "Unfortunately, while we've tried, we don't have anything new or in the pipeline right now for psychiatric sorts of conditions. Right now, the science is leading us toward pain and migraine."
But if innovation is their focus, Divan said there are many candidates under investigation for Parkinson's disease, pain and schizophrenia that the company could acquire to build out its neurological offerings.
In particular, Adamas Pharmaceuticals' ADS-5102, a drug for levodopa-induced dyskinesia that was filed for approval with the Food and Drug Administration in October, and Alkermes' ALKS 5461, a treatment for severe depression that met its primary endpoint in a Phase 3 pivotal trial last year, could be of interest to Lilly and other neuroscience players.
"We're not done, but I'm not sure which way, what the next one will be," Conley said.
Lilly won't have the easiest time beefing up its neuroscience business. While the company benefits from experience rolling out highly successful CNS drugs such as Prozac and Darvon, it faces hefty competition in the pain and migraine space.
Galcanezumab, for example, employs monoclonal antibodies to inhibit calcitonin gene-related peptide (CGRP), a protein partially responsible for the pain felt during a migraine. Amgen, Teva, Allergan and Alder Biopharmaceuticals, however, all have their own migraine drugs that also work on CGRP.
The Alzheimer's field has also become increasingly crowded as drugmakers race to develop new and effective treatments.
Additionally, Lilly has to deal with generic competition for Cymbalta, which lost its patent protection in 2013 and delivered 36% lower revenues in 2015 than 2014.
Still, the company's decision to broaden its pipeline puts it on the right track to be a heavy hitter in the space.
"They just haven't had to do innovation to keep things moving," due to the strength of Cymbalta, Strattera and Zyprexa, Divan said. "If they do get a couple migraine products out, and tanezumab, and maybe something in Alzheimer's, that alone would make them one of the leading CNS companies. But it's just a matter of having the products."