Elan shares slump 20pc as Alzheimer's drug trials fail to help
New medicine shows no improvement to patients in one part of drug testing
Shares in Irish pharmaceutical group Elan plunged as much as 20pc in Dublin yesterday after a potential Alzheimer's disease treatment backed by the firm failed to help patients taking part in one part of a drug trial.
The share collapse wiped €1.3bn off the company's market capitalisation before the stock recovered some losses later.
Drug giants Pfizer and a unit of Johnson & Johnson are Elan's development partners on the drug, called Bapineuzumab. They've been trialling the drug in two groups of patients, involving a total of four studies.
It had been anticipated that the set of results released yesterday would always be the least likely to reveal any neurological improvements for patients.
Trials of the drug involve Alzheimer's patients who are both carriers and non-carriers of the ApoE4 genotype. The gene makes people more susceptible to contracting the deadly illness.
The data released yesterday -- from a trial labelled Study 302 -- related to 1,100 patients with mild to moderate Alzheimer's disease who are carriers of the gene. They've now been taken off the drug.
Data from 1,300 patients involved in the trials who are not carriers of the gene will be presented at a conference in Stockholm in September.
But with Elan's longer term future firmly pegged to Bapineuzumab's potential, investors are nervous about the outcome of trial results from the other patient subsets.
So pivotal is the experimental drug to Elan's future that its chief executive Kelly Martin announced last March that he would remain in the role until all data from the drug trials had been released, despite having indicated in 2010 that he would retire last May. Elan releases first half financial data today.
"While we are disappointed in the topline results of Study 302, a more complete understanding of Bapineuzumab and its potential utility in mild to moderate Alzheimer's disease will be gained following the availability of additional data from the soon-to-be available non-carrier Study 301," said Steven Romano, the head of Pfizer's Medicines Development Group at its global primary care business unit.
Davy Stockbroker's analyst Jack Gorman said that while the data released yesterday was disappointing, expectations for the particular patient segment were not high.
He's already based potential Bapineuzumab financial forecasts on expectations that over 85pc of patients eventually taking it would be non-carriers of the ApoE4 gene.
Approval for the drug, if the data from the remaining trials is positive, could be sought as early as the end of this year, Elan has previously said.
If it goes to market, sales from the treatment could transform Elan.
It currently relies on sales of blockbuster multiple sclerosis treatment Tysabri for the bulk of its revenue.
Shares in Elan closed down 11.8pc at €9.79 in Dublin and were down 14pc at $11.62 (€9.62) in early afternoon trading in New York.