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

* Memory decline slowed 34 pct among mild Alzheimer's patients

* Memory data come from combining results of two failed trials

* 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 its experimental Alzheimer's drug led to a 34 percent reduction in memory decline for patients with mild symptoms over a period of 18 months, giving it potential ammunition to seek approval of the medicine that failed to benefit more advanced stages of the disease.

Lilly in August said the medicine, solanezumab, did not meet the primary goal of halting progression of the memory-robbing disease in patients with mild-to-moderate symptoms in two late-stage trials.

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

On Monday, the company presented results on the drug pooled from the two large studies that focused only on those with mild Alzheimer's.

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

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

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

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

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

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

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

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

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

(Reporting By Ransdell Pierson and Bill Berkrot; additional reporting by Toni Clarke in Boston; Editing by Michele Gershberg, Richard Chang and Maureen Bavdek)

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