Elan Reports Mixed Alzheimer Results

Elan(ELN - Cramer's Take - Stockpickr) and Wyeth(WYE - Cramer's Take - Stockpickr) reported mixed results from a midstage test of bapineuzumab in patients with Alzheimer's disease Tuesday.

Overall, bapineuzumab conferred no statistically significant benefit on the 240 patients enrolled in the phase II study. However, the drug was at least partially effective in a subgroup of patients lacking a higher genetic risk for developing Alzheimer's, the companies said Tuesday.

Based on these overall results, Elan and Wyeth said the ongoing phase III clinical trials of bapineuzumab will continue, although the companies did not say whether changes would be made to these studies.

Elan shares closed Monday at $27.11. Wyeth shares closed at $43.08.

Given the high stakes surrounding bapineuzumab, Tuesday's results from the phase II study are easily the most highly anticipated biotech event of the year. Elan and Wyeth are developing bapineuzumab to be the first Alzheimer's drug to modify the course of the disease and not just treat its symptoms.

Such a drug, if approved, might be the biggest ever sold, with sales potentially reaching $10 billion or more.

It remains to be seen whether bapineuzumab can be that mega-blockbuster Alzheimer's drug. The case laid out by Elan and Wyeth Tuesday morning has something for bulls and bears to feast on. The companies held back much of the data from the phase II study so that it can be presented at a meeting of Alzheimer's researchers in late July.

In Tuesday's announcement, Elan and Wyeth chose not to say much at all about the overall treatment effect of bapineuzumab compared to placebo on the entire group of patients with mild to moderate Alzheimer's enrolled in the study, which was the prospectively defined goal of the study. Instead, the companies broke down the results based on two retrospectively defined subgroups -- patients with and without a gene called ApoE4.