UPDATE 1-Epix Alzheimer's drug shows promise in small trial

(Updates with share reaction)

By Bill Berkrot

NEW YORK, Dec 18 (Reuters) - An new type of Alzheimer's disease drug being developed by Epix Pharmaceuticals Inc EPIX.O showed promise in helping improve memory and cognition in a very small, short-term study, the company and researchers said on Tuesday.

Following release of the study's data, Epix shares jumped nearly 82 percent before giving back almost half those gains.

The two-week trial tested the drug, PRX-03140, at two doses against a placebo. Another part of the study looked at the Epix drug at several doses in combination with Aricept, an Alzheimer's treatment sold by Pfizer Inc (PFE.N) and Japan's Eisai Co Ltd (4523.T).

Patients with mild Alzheimer's disease who took 150 milligrams of PRX-03140 showed a statistically significant improvement in memory and cognition compared with those who received the 50 mg pill or a placebo, the company said.

As measured on the Alzheimer's Disease Assessment Scale cognitive subscale, which is used to assess effectiveness of such therapies in clinical trials, patients in the 150 mg group had a mean 5.7 point improvement after just two weeks compared with a 1.1 point improvement in the 50 mg group and a 0.2 point worsening for those who received a placebo.

The 150 mg results were deemed to be statistically significant, although there were just 10 patients in each arm of the study.

"Dealing in this area of memory loss, we have nothing out there that's hit a home run and this study showed us a lot of promise," Dr Marvin Kalafer, one of the study's lead investigators, said in a telephone interview.

The Epix drug had no statistically significant impact in combination with Aricept following two weeks of treatment at any of the five tested doses ranging from 5 mg to 200 mg, the company said.

But Epix Chief Executive Michael Kauffman noted that Aricept and drugs like it typically take about 12 weeks to demonstrate a significant improvement, and that the trial was intended to demonstrate safety and tolerability, rather than efficacy, which will be a goal of larger, longer-term studies.

The drug appeared to be well tolerated with no serious drug-related adverse events, researchers said.

"We saw no real side affects; however, we did see some patients with remarkable changes in cognition and memory," Kalafer said.

PRX-03140 belongs to a new class of potential Alzheimer's treatments that selectively activates the 5-HT4 receptor in the brain. It works to stimulate production and release of acetylcholine in the brain. Most current treatments work by slowing degradation of acetylcholine but do not produce more of the important neurotransmitter.

Researchers and experts in the field said the results warrant longer-term studies of PRX-03140 with a much larger patient population.

Lexington, Massachusetts-based Epix plans to initiate a larger study of the drug in the first half of 2008, Kauffman said.