Controversy Shadows Medivation (Update) - TheStreet

Updated from 9:30 a.m. EDT

Shares of Medivation traded moderately higher Tuesday, one day after the biotech company announced that its experimental drug Dimebon improved the mental status of patients with Huntington's disease, according to results of a phase II study.

The positive news was not without controversy, however, which may be dampening investor enthusiasm.

Shares of the San Francisco-based company jumped as much as 22% to $14.70 in after-hours trading Monday, but selling pared back the gain, leaving the stock up just 3% at $12.42 in recent trading Tuesday.

Patients treated with Dimebon over three months showed a statistically significant improvement in cognition compared to placebo patients, as measured by the Mini-Mental State Examination (MMSE), a commonly used test of mental status, Medivation said.

Dimebon-treated patients also demonstrated positive improvement on the behavioral component of the United Huntington's Disease Rating Scale (UHDRS), although this result was not statistically significant.

The UHDRS also measures cognitive changes in Huntington's patients, but here, Dimebon apparently had no effect.

The data were noteworthy because there are no drugs approved to treat Huntington's disease, a progressive and fatal disease that gradually kills certain brain cells, causing involuntary muscle movement, deteriorating mental status and severe behavioral disturbances.

Other drugs have shown promise treating the motor deficits associated with Huntington's, but none has been able to help patients improve cognition or behavior, according to Dr. Karl Kieburtz, neurology professor at the University of Rochester and the principal investigator of the Dimebon phase II study.

"Cognitive and behavioral deficits can be the most disabling aspect of Huntington's disease. Even though this study was not powered to show a benefit, we got one," says Kieburtz.

Medivation CEO David Hung says cognitive and behavioral impairment are the most important unmet medical needs for Huntington's disease, so the company will share the phase II data with the U.S. Food and Drug Administration and start planning a confirmatory, phase III study that could lead to the drug's approval.

A Question of Study Endpoints

Monday's Dimebon data were not pristine, however. In an 8-K Medivation filed with the

Securities and Exchange Commission

concurrent with its press release, the company disclosed that it had inadvertently misled investors for years about the design of the Dimebon Huntington's study.

"Due to an inadvertent error, Medivation's prior disclosure incorrectly stated that the UHDRS was the primary endpoint of this trial," the company's 8-K stated.

In press releases dating back to 2006, as well as in its 2007 annual report filed with the SEC, Medivation stated that the UHDRS scale was the primary endpoint of Dimebon's phase II Huntington's Disease study.

Hung now says that's wrong. Safety and tolerability were the primary endpoints of the study from the beginning, with UHDRS one of three secondary endpoints measuring the drug's efficacy.

"UHDRS has never been the primary endpoint of the study," says Hung, who blames a "clerical error" discovered just this week as the reason why previous descriptions of the study's design were mistaken.

A posting of the study's design on the National Institutes of Health clinicaltrials.gov Web site supports Hung's assertion.

Kieburtz designed the Dimebon study and says safety and tolerability were definitely the primary endpoints, with MMSE, UHDRS and ADAS-cog included as secondary efficacy endpoints from the beginning.

"Anyone who says otherwise is ridiculous," he added.

This controversy may seem like inside baseball, but it's potentially important because Monday's results wouldn't be as strong if the endpoints or design of the Dimebon study were changed midstream.

In addition to its work with Huntington's disease, Medivation is running a phase III study of Dimebon as a treatment for Alzheimer's disease. As such, Dimebon is in a competitive race with bapineuzumab, the Alzheimer's drug from

Elan

(ELN)

and

Wyeth

( WYE).

Other companies seeking new treatments for Huntington's disease include

Forest Labs

(FRX)

,

Amarin

(AMRN) - Get Report

, Danish drug firm

NeuroSearch

and privately held Prestwick Pharmaceuticals.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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