Updated from 7:03 a.m. EDT

Elan ( ELN) and Wyeth ( WYE) are eliminating the highest dose of their Alzheimer's drug bapineuzumab from two phase III studies after independent safety monitors concluded that patients were at risk for developing swelling of the brain, the companies announced Thursday.

The two phase III studies affected are enrolling mild to moderate Alzheimer's patients who don't carry a gene known as ApoE4 that is known to increase the risk of developing the disease.

The need to remove the highest dose of bapineuzumab from studies enrolling Alzheimer's patients who are "non-carriers" of the ApoE4 gene indicates that the risk of potentially dangerous brain swelling, or vasogenic edema, is more widespread than Elan and Wyeth originally anticipated.

These patients weren't considered to be at high risk for the complication, based on safety data from an earlier phase II study of bapineuzumab.

Two other phase III studies of bapineuzumab in patients carrying the ApoE4 gene aren't affected. These studies are testing a single, lower dose of the drug, in part, because it was already known that ApoE4 "carriers" had an increased risk for brain swelling.

The decision to alter the ongoing phase III studies was made by an independent safety monitoring committee after a review of reports of vasogenic edema in patients. Elan and Wyeth didn't disclose how many patients were adversely affected.

The highest of three doses of bapineuzumab, 2.0 mg/kg, is being dropped from these studies. Patients treated with two lower doses of the drug will continue and patients currently on the high dose of bapineuzumab will switch to a lower dose.

"Our review of the safety data and the feedback from the Safety Monitoring Committee made it clear that continued development of the highest dose was not advisable," said Elan President Carlos Playa, in a statement. "The decision to remove the highest dose from development reduces risk to patients and it also helps to reduce risk to the overall development effort."

In a phase II study of bapineuzumab released last year, vasogenic edema was reported in 10 Alzheimer's patients who carried the ApoE4 gene and two patients who were not ApoE4 carriers.

Bapineuzumab didn't improve the mental status or function of non-ApoE4 carrying patients compared with placebo.

Elan and Wyeth did report that bapineuzumab improved cognition in patients without the ApoE4 gene in the phase II study, but the results were weak and disputed, causing Elan's and Wyeth's stock price to fall.

Elan shares were down 3.6% to $6.34 in recent trading. Wyeth, in the midst of a takeover by Pfizer ( PFE) was down 0.6% to $43.04.

At the time of publication, Feuerstein's Biotech Select model portfolio had no positions in the stocks mentioned.

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; click here to send him an email.

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