Alzheimer's Drugs: Investors' Impatience

Mixed drug trial results at the International Conference on Alzheimer's Disease deflate Wall Street, but scientists remain hopeful

by Catherine Arnst

The disconnect between slow, plodding scientific research and the demands of Wall Street are on stark display in the world of Alzheimer's drug development.

While scientists in the field expressed excitement at the advances in knowledge coming out of the prestigious International Conference on Alzheimer's Disease, or ICAD, held in Chicago on July 26-31, investors and stock analysts focused on one disappointing report after another. By the close of trading on July 30, shares of two companies with big stakes in treatments for Alzheimer's—the fourth most deadly disease in the developed world—had taken huge hits. Wyeth (WYE) plummeted 11.8%, to 39.76, and Elan's (ELN) stock lost nearly 42% of its value, down to 20.25. Another pharma house, Eli Lilly (LLY), released disappointing test results at the end of trading, but its stock still slipped 1.76%, to 47.41.

"Wall Street either overly hypes a new discovery or damns it too soon," complained Rudolph Tanzi, director of the genetics and aging unit at Massachusetts General Hospital in Boston and a leading Alzheimer's researcher. "This was just the first wave of drugs, and it would be terribly bad for the field and for patients to make quick assumptions. There are many other drugs in the pipeline, some of them a thousand times more potent." In fact, the Alzheimer's Assn. has decided that there are finally enough drug candidates in human trials to start convening ICAD annually, after meeting only once every two years since the conference started in 1988.

Moving Ahead With Phase III

Nevertheless, much of the ICAD news on that first wave of drugs was not good. On July 29, Wyeth and Elan released final results of a mid-stage, 230-patient trial of one of the more closely watched drugs in the Alzheimer's pipeline, bapineuzumab, and they landed with a disappointing thud—even though Wall Street had reacted positively to similar preliminary results (BusinessWeek.com, 6/18/08) for the drug just a month earlier. The companies reported that the drug improved symptoms slightly only in a subgroup of patients who do not carry a genetic mutation associated with particularly severe Alzheimer's. The drug also did not work any better at higher doses, and almost 10% of patients on the drug developed swelling in the brain.

Despite the mixed results, Wyeth and Elan plan to start a large phase III trial with 4,100 patients in December, in the hopes that the subgroup results will be more marked in a larger group.

Also at ICAD, Lilly reported that its Alzheimer's candidate did not produce any meaningful memory improvements in a small early-stage trial, although the drug was safe. Lilly plans further trials. And Myriad Genetics (MYGN) went into detail about the failure of Flurizan, the first Alzheimer's drug to reach the final phase of clinical testing. The drug had no significant efficacy and has been dropped. Myriad's stock price took a hit back in June and has been rising since.