Shares of the company rose as much as 6 percent on Friday as investors bet the treatment, solanezumab, may help patients in the early stages of the disease, which has so far stumped the research efforts of the world's largest drugmakers.

Lilly did not give detailed data on its findings, but its executives said they were the first glimmer of hope in a large clinical trial that removing the toxic protein beta amyloid from the brains of Alzheimer's patients might alter the course of the disease.

Scientists were far more cautious and said it was impossible to gauge what the findings mean until full results are released at a neurology meeting on October 8 in Boston.

The late-stage trials, known as EXPEDITION 1 and 2, tested solanezumab in patients with mild-to-moderate Alzheimer's disease, compared with a placebo. Both of these studies failed to meet their primary goals.

However, a secondary analysis of the results looking at the two-thirds of patients with mild Alzheimer's from both studies showed a statistically significant slowing of cognitive decline, the company said.

"We recognize that the solanezumab studies did not meet their primary endpoints, but we are encouraged by the pooled data that appear to show a slowing of cognitive decline," said Lilly Chief Executive John Lechleiter. "We intend to discuss these data with regulatory authorities to gain their insights on potential next steps."

Dr Samuel Gandy, of the Mount Sinai Alzheimer's Disease Research Center in New York, said the fact that Lilly had to combine findings from both studies suggests any positive signal is fairly weak.

"That sounds really pretty borderline," Gandy said in an interview. "It's hard for me to characterize without seeing how they came up with this."

Dr Ronald Petersen of the Mayo Clinic in Rochester, Minnesota, and chair of the federal Advisory Council on Alzheimer's Research, Care and Services, called it a soft finding.

"It's a bit subtle, but it seems to be real and it may in fact mean that the drug is doing what it's supposed to do," he said in a statement.

Alzheimer's experts already see reason to test the theory that a treatment may need to be delivered even before patients show signs of dementia, when the disease may have already caused irreversible brain damage.

Lilly's Dr Eric Siemers, who directs the company's Alzheimer's research program, took a different view.

"For us to see what appears to be a signal in this pooled data in mild patients, we are quite pleased," he said. "That would suggest you don't have to move much earlier in the pathology of the disease."

Lilly shares were up 3 percent at $43.69 on Friday afternoon on the New York Stock Exchange, off an earlier high at $45.00.

ODDS STILL SLIM

Alzheimer's is the most common form of dementia and the sixth-leading cause of death in the United States. An estimated 5 million Americans are believed to have the disease, and a successful treatment could be worth billions of dollars.

The Alzheimer's Association called the Lilly results encouraging and said that if data showing a patient response to targeting beta amyloid levels could be replicated, it would be "a major step forward" in fighting the disease.

Wall Street analysts had expected the Lilly drug to fail in its main goals, particularly after a similar treatment from Pfizer Inc and Johnson & Johnson called bapineuzumab did not help either mild or moderate Alzheimer's patients in study results reported earlier this month.

An earlier-stage trial of immune system therapy Gammagard, from Baxter International Inc, has also raised hopes by showing a handful of patients saw their Alzheimer's stabilize while on the drug.

But some were encouraged by Lilly's findings, which left the door open for the drug to be considered by health regulators.

"Basically the odds of approval just went up from like 10 percent to maybe 20 to 30 percent," said Dr Mark Schoenebaum, analyst with ISI Group, noting that patients with a mild form of the disease comprise at least half of the diagnosed population. "(That's) still high risk, but much better than expected."

"Theoretically all possibilities are still on the table," Sanford Bernstein analyst Tim Anderson wrote in a research note. "This includes the possibility that solanezumab could be filed for regulatory approval, given the large unmet medical need in patients with Alzheimer's disease and the generally acceptable safety profile."

"Our best guess is that more studies would have to be done before FDA or other regulatory agencies would consider approving solanezumab," he said.

Lilly executives declined to say whether they would need to conduct any more trials. The U.S. Food and Drug Administration said it had yet to review the Lilly results, but looked forward to discussing next steps with the company.

The company's trials tested solanezumab in more than 2,050 patients in 16 countries, over an 18-month period. Side effects included lethargy, rash, malaise and angina, compared to the placebo.

(Additional reporting by Adithya Venkatesan in Bangalore; editing by Bernadette Baum, Leslie Gevirtz and Matthew Lewis)

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