Alzheimer's Development Financing: Risky Therapies Call for Innovative Deals

Eli Lilly has hedged its bets on its two late-stage Alzheimer's disease candidates. In a deal with TPG-Axon and Quintiles' partnering group NovaQuest, Lilly sheds risk (and potentially reward) in this notoriously difficult therapeutic space. A model for private equity / pharma deals going forward?

The late-August hiccup in Bristol-Myers Squibb Co. and Pfizer Inc.’s development plan for the oral Factor Xa inhibitor apixaban may only cause a short delay to the expected blockbuster anti-clotting drug. On the other hand, it may be a harbinger of more painful clinical snafus to come. But whatever the eventual outcome for apixaban, right now Bristol looks pretty smart for partnering the drug for a handsome fee last April. [See Deal]

While Bristol has made hedging its late-stage bets a mantra—and a significant means to generate development capital, thanks to upfront payments of $250 million from Pfizer, $100 million from AstraZeneca PLC, and $100 million from Merck & Co. Inc. in the past few years—it isn’t alone among Big Pharma in the risk reduction game. Eli Lilly & Co. announced in July an agreement with TPG-Axon Capital and Quintiles Transnational Holdings Inc

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