Elan shares surge on positive Alzheimer's drug trial data

SHARES IN Irish biotech group Elan jumped to a three-year high yesterday following positive headline data on a new treatment for Alzheimer’s disease.

Elan’s partner, Wyeth, recorded the biggest jump on the Standard Poor’s 500 index after the two companies disclosed that their bapineuzumab drug (AAB-001) was successful in meeting “statistically significant and clinically meaningful benefits” for a substantial proportion of Alzheimer’s disease patients in a phase II trial.

In a joint statement, the two companies conceded the drug did not achieve statistically significant results overall in the tests involving 240 patients in the US, but added that its benefits over a placebo were significant in an important subgroup.

“The preliminary analyses of the phase II study are a continued validation of the amyloid approach to Alzheimer’s disease and an important milestone in our companies’ ongoing commitment to bring new treatment options to patients,” said Kelly Martin, president and chief executive of Elan.

“These results clinically support our decision to move into phase III last year.”

Shares in Elan jumped more than 10 per cent to €19 before profit-taking saw it give up almost half those gains to close at €18.18, a gain of 5.7 per cent on the day.

Elan shares have not traded at these levels since February 2005, when the stock crashed after the company pulled its multiple sclerosis drug, Tysabri, from the market just weeks after it had gone on sale following the emergence of cases of a potentially fatal brain disease.

Tysabri has since returned to market and is recording annualised revenue of $600 million (€386 million). It hopes to grab a 25 per cent share of the multiple sclerosis market by 2010.

In US trade last night, Elan was up more than 10 per cent at $29.95.

Elan and Wyeth have been working for seven years to develop new approaches to treating Alzheimer’s which, the companies say, affects more than 26 million people worldwide, including as many as five million in the key US market.

The update on AAB-001 was keenly awaited. If successful in final-stage trials, the medicine could become the first drug to modify the course of Alzheimer’s, the most common cause of dementia, rather than just relieving its symptoms.

The project remains risky, however, given past failures and looming competition from other companies. – (Additional reporting: Bloomberg/Reuters)