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Pfizer Licenses Medivation Alzheimer's Drug

Pfizer will pay $225 million up front to gain worldwide marketing rights to Dimebon.

Updated from 7:48 a.m. EDT.



has landed a monster licensing deal for its experimental Alzheimer's disease drug.



will pay $225 million up front to Medivation to gain worldwide marketing rights to Dimebon, the companies announced Wednesday.

Dimebon is currently in a pivotal phase III study enrolling 525 Alzheimer's patients worldwide. If a positive study leads to the drug's approval, Pfizer will pay Medivation another $500 million. Medivation and Pfizer will share development expenses and profits and losses on a 60-40 basis, with Pfizer assuming the larger share of costs and profits and losses.

The partnership also grants Pfizer licensing rights to Dimebon as a treatment for Huntington's disease.

Medivation shares closed Tuesday at $26.03, an all-time high. The stock was soaring in recent trading Wednesday, adding 13% to $29.41.

The cash outlay by Pfizer for partnership rights to Medivation's Dimebon far outstrips the $100 million upfront fee ($350 million total) paid in May by Danish drug firm

Lundbeck A/S


Myriad Genetics


for non-U.S. rights to the latter's Alzheimer's drug Flurizan. That deal went bust for Lundbeck in June, however, when Flurizan's phase III study failed.

Pfizer is clearly hoping for a better outcome with Dimebon because the pharmaceutical giant, like the rest of Big Pharma, is desperate for new blockbuster drugs. Pfizer, in particular, needs another multibillion dollar product to replace the roughly $10 billion a year in revenue generated by its cholesterol drug Lipitor, which faces generic competition in late 2011.

Results from the Dimebon phase III study should be released in 2010. If Dimebon can halt or reverse the loss of mental status and function in Alzheimer's patients, peak sales could match or even surpass that of Lipitor.

Pfizer currently sells Aricept, the leading Alzheimer's drug today, in partnership with Japanese drug maker


. Pfizer has its own internal Alzheimer's research program, but the three drugs in human testing are still in early phase I studies, according to

For Medivation, timing appears to be everything. CEO David Hung knew he had a precious commodity in Dimebon, and he made sure that whoever wanted rights to the drug paid handsomely for it.

The $100 million upfront licensing fee that Lundbeck paid to Myriad Genetics likely set a minimum floor for any future late-stage Alzheimer's drug partnership deal.

Then there's bapineuzumab, the Alzheimer's drug from






, which was supposed to be a sure-thing $20 billion blockbuster. At least that's what the bulls had been saying all spring and summer, right up to the presentation of phase II data at the ICAD conference in late July. The results were disappointing, which sank bapineuzumab's odds of ultimate success.

The $100 million paid for rights to Flurizan, and the drug's subsequent failure, followed quickly by bapineuzumab's hiccup, made Dimebon a much more valuable drug.

Whether Dimebon will actually work as a treatment for Alzheimer's remains to be seen. Results from an earlier clinical trial were very positive, however, with Dimebon-treated Alzheimer's patients actually showing improvements in cognition and daily function. These data, despite being published in July in the British medical journal

The Lancet

, remain somewhat controversial because the study was conducted entirely in Russia.

Medivation shares have doubled in price since the middle of July, reflecting not only investors' appreciation for Dimebon as a scarce and potentially lucrative Alzheimer's drug, but also in anticipation that the company would strike a lucrative partnership deal.

On Wednesday, Medivation CEO Hung delivered on the latter.

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

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