Elan, Wyeth drug helps some Alzheimer's patients

LONDON (Reuters) - Elan and Wyeth's key new drug bapineuzumab worked for a substantial proportion of Alzheimer's disease patients in an intermediate clinical trial, supporting a prior decision to start final Phase III tests.

The two companies said on Tuesday that although the drug did not achieve overall statistically significant results in the Phase II study, its benefits over placebo were significant in an important subgroup.

Shares in Irish drugmaker Elan rose 8.9 percent to 18.73 euros on the news by 1335 GMT -- after hitting a three-year high of 19.00 euros -- while Wyeth's stock gained 5.5 percent to $45.45 in early New York trading.

The update on the antibody medicine, also known as AAB-001, is perhaps the year's most keenly awaited biotech trial result.

If successful in final-stage trials, the medicine could be the world's first drug to modify the course of Alzheimer's, the most common cause of dementia, rather than just relieving its symptoms.

Some analysts have forecast eventual annual sales of $13 billion, which would make it the biggest drug ever.

But the project remains high risk for Elan and its U.S. partner Wyeth, given past failures in the Alzheimer's treatment field and looming competition from other companies, such as Eli Lilly and Myriad Genetics. Goldman Sachs analysts estimated a 60 percent probability of success.

Because of the design of the clinical study and the limited number of patients involved, the Phase II trial had not been expected to show overall statistical significance.

Significant and clinically meaningful benefits were, however, seen in a genetic sub-group of patients known as ApoE4 non-carriers, who make up between 40 and 70 percent of the Alzheimer's disease population.

Brokerage Leerink Swann said it was upgrading its recommendation on Wyeth to "outperform" on the back of the news.

'BETTER THAN EXPECTED'

"Overall, these sets of data are much better than we expected, given the strong response observed in non-ApoE4 carriers," said Ian Hunter, an analyst at Goodbody Stockbrokers in Dublin, who rates Elan "add".

Jack Gorman of Davy Stockbrokers, describing the results as "very encouraging", said his price target for Elan's U.S. shares could rise above $30 from around $29 currently.

People who carry a gene that causes their bodies to produce a substance called apolipoprotein (Apo) E4 are known to be at increased risk of developing Alzheimer's, but many patients still get the condition without this genetic variation.

Bapineuzumab aims to fight deposits called beta amyloid plaques, which are linked to the degenerative brain condition.

"The preliminary analyses of the Phase II study are a continued validation of the amyloid approach to Alzheimer's disease," Elan Chief Executive Kelly Martin said in a statement.

"These results clinically support our decision to move into Phase III last year."

Detailed results will be presented at the International Conference on Alzheimer's Disease in Chicago on July 29.

In the Phase II trial, ApoE4 non-carriers showed benefit from bapineuzumab treatment based on a number of different scoring systems that measure Alzheimer's disease. Loss of brain volume, which is associated with Alzheimer's, was also significantly less in this set of patients.

Given the world's ageing population and the unmet need for an effective treatment, new medicines for Alzheimer's are seen as one of the big untapped opportunities for the pharmaceuticals industry.

Existing acetylcholinesterase inhibitor drugs, like Eisai and Pfizer's market-leader Aricept, can reduce symptoms but do not modify the course of the disease.

(Additional reporting by Mark Potter; Editing by Quentin Bryar and Elizabeth Fullerton)