UPDATE 1-Lilly drug may help memory loss in mild Alzheimer's

* Memory decline slowed 34 pct among mild Alzheimer'spatients

* Memory data come from combining results of two failedtrials

* Lilly shares gain more than 4 percent

(Adds company, doctor comment, background, share price,bylines)

By Ransdell Pierson and Bill Berkrot

Oct 8 (Reuters) - Eli Lilly and Co said itsexperimental Alzheimer's drug led to a 34 percent reduction inmemory decline for patients with mild symptoms over a period of18 months, giving it potential ammunition to seek approval ofthe medicine that failed to benefit more advanced stages of thedisease.

Lilly in August said the medicine, solanezumab, did not meetthe primary goal of halting progression of the memory-robbingdisease in patients with mild-to-moderate symptoms in twolate-stage trials.

But while some rival compounds have been relegated to thescrap heap after similar failures, Lilly indicated at the timethat there were some signs that solanezumab had preventedcognitive decline for people at an earlier stage of the disease.

On Monday, the company presented results on the drug pooledfrom the two large studies that focused only on those with mildAlzheimer's.

Lilly's shares rose more than 4 percent as some investorswere encouraged that the improvement could warrant considerationfrom the U.S. Food and Drug Administration.

"Today there are no medicines that slow progression ofAlzheimer's and we think that ought to be considered as we gotalk to regulators," David Ricks, head of Biomedicines forLilly, said in a telephone interview.

"We'll make the argument this data is important in view ofthe high unmet need. But ultimately it's the FDA's judgment tomake in terms of whether to let the drug on (the market) withthese data," Ricks said.

The newly released data did not show that solanezumaboffered protection against the loss of physical function.

But it will likely lend further credence to the theory thatAlzheimer's must be attacked early in the progression of thedisease for drugs to have an impact.

Dr. Ronald Petersen, Director of the Mayo Clinic Alzheimer'sDisease Research Center in Rochester, Minnesota, threw out anote of caution about the drug's prospects.

"What you are seeing in the data is statisticallysignificant," he said. "But its hard to say that this is goingto be meaningful clinically."

Initial data unveiled in August created doubts about whetherthe drug could be approved by the FDA without large new studies.It followed disappointing results for Pfizer Inc's andJohnson & Johnson's bapineuzumab, which also failed inpivotal studies. Both treatments block a protein called betaamyloid that forms plaque deposits on the brain.

Eli Lilly shares rose 4.2 percent, or $2.03, to $50.27 inafternoon trading on the New York Stock Exchange

(Reporting By Ransdell Pierson and Bill Berkrot; additionalreporting by Toni Clarke in Boston; Editing by MicheleGershberg, Richard Chang and Maureen Bavdek)

((ransdell.pierson@thomsonreuters.com)(646 223 6030))