June 19 (Reuters) - Eli Lilly ( LLY ) said on Thursday

it would appeal against a UK agency's recommendation to not

reimburse the cost of Alzheimer's drug Kisunla, blocking access

for patients seeking treatment under the country's state-run

health service.

The U.S.-based drugmaker plans to appeal on the grounds that

the National Institute for Health and Care Excellence's (NICE)

recommendation was unreasonable based on the evidence the

company, clinical experts and patient groups have submitted.

Kisunla was approved in the UK last year to treat mild

cognitive impairment and mild dementia caused by Alzheimer's

disease. NICE, which determines the cost-effectiveness of

treatments paid for by public funds, had at the time deemed

Lilly's drug too expensive for wide use.

Leqembi, a rival drug from Eisai ( ESALF ) and Biogen

, was also deemed too costly for UK's state-run health

service in August last year.

NICE's reimbursement recommendation marks another hurdle for

Lilly's drug, after the EU medicines regulator in March rejected

Kisunla saying the treatment's ability to slow cognitive decline

was not significant enough to outweigh the risk of serious brain

swelling in patients.

Both Kisunla and Leqembi are designed to clear sticky clumps

of a protein called amyloid beta in the brain, believed to be a

hallmark of Alzheimer's.

They entered the market after decades of failed attempts to

combat the mind-wasting disease.

Adoption of the drugs has been slow in the United States due

to the complexities involved with their use, such as the need

for extra diagnostic tests and regular brain scans to monitor

for potentially serious side effects.