Eli Lilly will partner with AC Immune to develop new treatments for Alzheimer’s disease and other neurodegenerative disorders using AC Immune’s Morphomer™ platform, the companies said today, through a collaboration that could generate more than CHF 1.89 billion ($1.9 billion) for the Swiss biopharma.

The companies have signed a license and collaboration agreement to research and develop tau aggregation inhibitor small molecules, focusing primarily on AC Immune’s ACI-3024, which according to the company has shown tau aggregation inhibition in preclinical models.

AC Immune agreed to conduct the initial Phase I development of the Morphomer tau aggregation inhibitors. Lilly agreed to fund and conduct further clinical development, and will receive worldwide commercialization rights for the tau aggregation inhibitors in Alzheimer’s disease.

However, AC Immune retained development rights in orphan indications, as well as co-development and co-promotion options in certain indications outside Alzheimer’s.

Landmark Partnership

“This landmark partnership with Lilly is transformational for the future of AC Immune,” AC Immune CEO Andrea Pfeifer, Ph.D., declared in a statement. “Lilly’s substantial experience in neurology, and particularly in Alzheimer’s disease, is a major validation of our small molecule platform for CNS therapeutics. It also demonstrates the potential of our preclinical assets and adds substantial value to our pipeline. We look forward to working closely with Lilly in this exciting field over the coming years.”

AC Immune’s Morphomer platform is designed to generate small molecules or “Morphomers” that bind to misfolded proteins, break up neurotoxic aggregates, and inhibit their aggregation and seeding. The company says its Morphomers are capable of “excellent” brain penetration, bioavailability, and metabolic stability.

ACI-3024, also called Morphomer Tau,  is one of three therapeutic candidates originating from the Morphomer platform. The other two are Morphomer Abeta and Morphomer α-syn. The platform has also created two diagnostic development candidates, a Tau-PET imaging agent and an α-syn-PET imaging agent.

Lilly agreed to pay CHF 80 million ($80.4 million) upfront, and $50 million for a note convertible to an equity stake in AC Immune at a premium.

Lilly also agreed to pay AC Immune CHF 60 million ($60.3 million) tied to achieving near-term development milestones, as well as up to approximately CHF 1.7 billion ($1.7 billion) in payments tied to achieving development, regulatory, and commercial milestones, plus tiered royalty payments in the low double digits.

Eli Lilly is among numerous biopharmas that have tried to develop Alzheimer’s candidates in recent years, only to encounter failure.

In November 2016, Lilly scrapped plans to pursue regulatory approvals for solanezumab (LY2062430) after it failed a Phase III trial. Results from the EXPEDITION3 trial (NCT01900665) showed that solanezumab did not significantly slow cognitive decline in a Phase III trial with a total 2129 participants with mild dementia due to Alzheimer’s, according to a study published January 25 in the New England Journal of Medicine.

Another Opportunity

A 2014 Cleveland Clinic study found a 99.6% failure rate of clinical trials for Alzheimer’s drug candidates between 2002 and 2012. That study found high attrition rates for Alzheimer’s treatments, with 72% of agents failing in Phase I, 92% failing in Phase II, and 98% failing in Phase III.

“This agreement with AC Immune represents another opportunity to hopefully make progress against this devastating disease, and we look forward to together bringing tau aggregation inhibitors into clinical development,” added Mark Mintun, M.D., vice president of neurodegeneration and pain research at Lilly. “Lilly is an industry leader in Alzheimer’s research, with numerous ongoing scientific programs that target suspected causes of the disease, including amyloid plaques and tau tangles.”

Lilly’s Alzheimer’s pipeline includes the Phase III Positron Emission Tomography (PET) imaging agent Flortaucipir F 18 (formerly known as 18F-AV-1451 or Tau imaging agent). On September 5, Lilly trumpeted Flortaucipir F 18’s success in the Phase III “A16” trial (NCT03019536), in which it met its two primary endpoints, predicting brain tau pathology and predicting Alzheimer’s disease diagnosis.

Also in Lilly’s Alzheimer’s pipeline are two Phase II candidates—LY3002813 (N3pG-Ab MAb), a large molecule that binds to deposited amyloid plaque in the brain; and LY3303560 (Tau Deposit Antibody), a large molecule that binds selectively to tau protein in the brain—as well as a Phase I candidate, described on Lilly’s website as a large-molecule Aß42 antibody.

A third Phase II neurodegeneration candidate, LY3154207 (D1 PAM) is being studied for dementia associated with Parkinson’s disease. It is a small molecule that acts as a positive allosteric modulator of the dopamine receptor D1.

Lilly is one of three pharma giants with which AC Immune has Alzheimer’s focused development collaborations. The second is Johnson & Johnson’s Janssen Pharmaceuticals, which is partnering on ACI-35, a Phase Ib liposomal, therapeutic anti-pTau vaccine, discovered utilizing AC Immune’s SupraAntigenTM platform, under an up-to-$509 million partnership launched in 2015.

The third pharma collaboration partner is Genentech, a member of the Roche Group, with which AC Immune is partnering on the Phase III anti-Abeta antibody crenezumab, and a Phase II anti-tau antibody, through collaborations that began with anti-beta-amyloid antibody research in 2006 and expanded in 2012 to a second program focused on anti-Tau antibodies.

On July 25, AC Immune announced data from two Phase II trials showing that treatment with crenezumab was associated with a consistent decrease in Abeta oligomer levels in cerebrospinal fluid of patients with Alzheimer’s, with 86% of IV patients and 89% of subcutaneous patients having lower levels of Abeta oligomers at week 69 than at baseline.

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