THE FAILURE of one of its potential Alzheimer’s treatments to get through clinical trials will cost Elan $117 million, the pharmaceutical group said yesterday.
Dublin-listed Elan’s partners, Pfizer and Johnson Johnson, confirmed yesterday they were abandoning the development of bapineuzumab intravenous, a potential treatment for Alzheimer’s Disease, after it failed to pass a second round of clinical tests.
Elan said in a statement that the decision would result in it taking a charge of $117.4 million in its third-quarter results to account for its investment in the development of the drug.
Both the statement and a spokesman pointed out yesterday that the decision also meant that Elan would no longer have to pay its share of the development costs.
The news sparked a sharp fall in Elan’s share price in Dublin. Its stock closed 8.75 per cent down at €8.43, its lowest since December last year.
Analysts yesterday said the news was disappointing for both investors and researchers.
Elan discovered the drug but three years ago enlisted Johnson Johnson and Pfizers as partners to develop it. If it had been successful the Irish company stood to get 20 per cent of any revenues generated.
The three are continuing to fund and work on the development of three other possible Alzheimer’s treatments – a different version of bapineuzumab, a potential vaccine against the disease known as ACC001, and a third substance called AAB003.
Elan owns 49.9 per cent of Janssen AI, which Johnson Johnson established to work with Pfizer on Alzheimer’s treatments. Elan owns 25 per cent of the overall venture, and is entitled to a share of revenues should any of the drugs be commercialised.
Bapineuzumab intravenous was designed to treat mild to moderate Alzheimer’s. The substance broke down deposits that build up on the brains of patients with the disease.
The three companies believed that tackling this symptom was key to treating the progress of the disease. However, clinical trials found that it failed to improve symptoms in the second of four scheduled clinical trials.
Elan chief executive Kelly Martin said the group would continue to focus on Tysabri, the multiple sclerosis treatment that it sells in partnership with Biogen.
A spokesman said yesterday that this is expected to deliver revenues of €3 billion by 2016. At this stage more than 69,000 patients are using the treatment. That figure is expected to grow by 15 per cent this year.
He added that the group would continue to work on strengthening its balance sheet. It had reduced debts to $600 million from $3 billion over the last three years.
The market for a successful Alzheimer’s treatment is potentially worth multiple billions as more people are living longer in developed countries. The disease mainly affects older people.
Eli Lilly, which has a manufacturing operation in Cork, is due to produce trial results for another Alzheimer’s treatment.