Baxter International Inc. (BAX), Eli Lilly & Co. (LLY): Diagnosing Alzheimer’s First

Classically, Alzheimer’s diagnosis was based purely on behavioral and cognitive deficiencies, which only manifest after marked neurodegeneration.  Genetic advancements have identified certain markers for predisposition, and the clinical trials for Gammagard, solanezumab, and bapineuzumab accounted for these genetic influences.  Unfortunately genetics are not a perfect indicator of disease risk, and more directed molecular diagnostics would be highly valued.

Eli Lilly has made strides in diagnostic development with the recent purchase of two PET markers for tau tangles from Seimans Medical SolutionsUSA, Inc.  Initially Eli Lilly & Co. (NYSE:LLY) plans to use these markers in R&D to rationally develop and monitor a new class of drugs that target tau protein, rather than amyloid plaques.  These acquisitions come on the heels of FDA approval for Amyvid in 2012, a molecule which highlights amyloid in PET scans.  This shift in short-term thinking signals potential long term advancements in targeted drug design.

Eli Lilly & Co. (NYSE:LLY) may also choose to follow the path of GE Healthcare and license the imaging tracer for use by other companies in R&D.  GE licensed the amyloid tracer flutemetamol to Merck & Co., Inc. (NYSE:MRK) for development of their oral amyloid precursor inhibitor.  The deal allows GE and Merck to co-develop their products as potential companion molecules to be marketed together.

In the meantime, Eli Lilly & Co. (NYSE:LLY) reserves the right to market their diagnostic molecules commercially.  The market for such molecules may actually be significantly more robust than the Alzheimer’s population alone.  A recent Harvard study suggested that 2/3 of healthy individuals would take a precautionary Alzheimer’s test were one made easily accessible.  A PET scan is likely beyond the accessibility they had in mind, but the statistic highlights the profitability of a reinvigorated focus on diagnostics.

The industry as a whole should follow Eli Lilly & Co. (NYSE:LLY)’s lead and invest in technology for early detection.  It will enhance R&D capabilities, while simultaneously providing revenue.  Successful therapies will come naturally after.

The article Diagnosing Alzheimer’s First originally appeared on Fool.com and is written by Seth Robey.

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