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Pfizer Dealt an Alzheimer's Blow

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The pharma giant and Medivation had high hopes for Dimebon but testing proved otherwise.

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It should have come as no surprise that a Russian allergy medication was not an effective treatment for Alzheimer's disease, but shareholders and believers-in-miracles are all a bit disappointed by today's news that Pfizer (PFE) and Medivation (MDVN) didn't find the magic bullet for the debilitating disease.

The companies announced the preliminary results from their Connection study, a late-stage clinical trial testing the effectiveness of Dimebon in the treatment of patients with mild-to-moderate Alzheimer's, that showed the drug did not meet primary or secondary endpoints. The announcement sent shares of Medivation down almost 70% in pre-market trading, with the stock continuing to linger around $13 per share for the remainder of the trading day.

"The results from the Connection study are unexpected, and we are disappointed for the Alzheimer's community," said Medivation's chief executive Dr. David Hung. "We are working with our colleagues at Pfizer to better understand the Connection data and we plan to present these data at an upcoming medical meeting."

Dimebon has an interesting background; the 20-year-old drug was used as an antihistamine in Russia until it was replaced by other, newer drugs that entered the market. It is no longer marketed anywhere, but researchers continued to do studies on the drug in rodents and found that it blocked certain neurological pathways suspected to be related to neurodegenerative diseases like Alzheimer's and Huntington's disease. Pfizer and Medivation are still conducting four other clinical trials in humans to determine the safety and effectiveness of the drug in patients with both diseases.

"We are evaluating the Connection data with Medivation. After that review, Pfizer will be in a position to determine appropriate next steps regarding the Dimebon program," said Dr. Briggs W. Morrison, senior vice president, clinical development, Primary Care Business Unit at Pfizer.

While this is clearly a huge hit to a small company like Medivation, the implications for Pfizer could be just as detrimental. Leerink Swann analyst Seamus Fernandez called the results "disappointing" and said "it removes an upside opportunity from Pfizer's late-stage pipeline."

Dimebon's failure means that Pfizer won't have another late-stage drug to report on until the end of this year -- a long time for one of the world's largest pharmaceutical companies. It also means that Pfizer will miss out in plenty of revenues -- Fernandez had predicted that the drug would be pulling in $425 million worldwide by 2016.

The negative results of the Connection study have come as a shock to many, but others were already skeptical. The earlier studies that pointed to the drug's effectiveness in the treatment of Alzheimer's were done largely in Russia with small groups of patients. Many shareholders and analysts were concerned that the results of these studies could not be taken at face value due to the size of the study or the fact that Alzheimer's drugs aren't used very widely in the Russian population.

Pfizer is currently developing eight other drugs for the treatment of Alzheimer's disease, but analysts and shareholders won't know what effect the Dimebon results will have on the rest of the pipeline until after more data is released. It is likely that some of Pfizer's other drugs won't be successful either.

The treatments currently on the market can slow the progression of the disease, but not cure it, and drugs aren't an option for all patients. Pfizer and its partner Eisai market Aricept, the most widely prescribed medication for people in all phases of the disease who exhibiting signs of cognitive impairment.

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No positions in stocks mentioned.

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