Elan Halts Trial of Alzheimer's Drug After Inflammation Problem Develops
By QUENTIN FOTTRELL
Dow Jones Newswires
DUBLIN -- Irish pharmaceuticals group Elan Corp. said it is temporarily suspending a clinical trial of a highly anticipated treatment for Alzheimer's disease after four patients in France showed signs consistent with inflammation of the central nervous system.
NCB Stockbrokers said failure of the AN-1792 treatment -- considered a potential blockbuster drug for Elan -- would be a "clear blow to sentiment" for the company's shares.
Elan shares fell 11%, or 5.27 euros, to 45 euros on the Dublin Stock Exchange Friday. The stock makes up 23% of the weighting of the ISEQ Overall index and had been a prime contributor to Ireland's position as the best-performing stock market in Europe during 2001.
Analysts had expected AN-1792, developed with Wyeth-Ayerst Laboratories, a unit of American Home Products Corp., to come onto the market by about 2005.
Elan had been expected to receive "significant milestone payments" from AHP as the development program progressed toward the marketplace, said NCB Stockbrokers.
Nonetheless, some market watchers say it's too early to forecast complete failure for the trial or to change their financial forecasts for Elan.
Ian Hunter, analyst at Goodbody Stockbrokers, is cutting his 12-month share price target of $71 (80.27 euros), and will release the exact figure later Friday. Elan's shares fell 14%, or $6.17, to $38.65 on the New York Stock Exchange Friday.
"It's not just a confidence issue for AN-1792," Mr. Hunter said, "but for Elan's longer-term pipeline, and [it] will impact market perceptions of its optimistic statements regarding its drugs in progress."
Robert Perryman of Merrion Stockbrokers disagreed, however. Mr. Perryman said the news is "most definitely not the end of AN-1792 as some analysts have been suggesting."
He believes the inflammation problem may be related to an infection that the patients have picked up. "If it was product-related, it's more likely to have been seen across all geographies," he said.
"These are just four patients out of 97 patients in France and around 360 world-wide. The jury is still out. All drug developments encounter obstacles," Mr. Perryman said.
Still, some believe this report could hurt AN-1792 down the line.
"Even if the trial resumes, confidence in the drug will be reduced with increased concerns on side effects and/or other possible interactions with patient susceptibility to other diseases," Goodbody's Mr. Hunter said.
Elan and Wyeth-Ayerst said they'll provide further guidance regarding the resumption of dosing following an investigation and consultation with an independent safety monitoring committee.
The Phase IIA study was designed to measure the immune response to beta amyloid peptide immunization in patients with Alzheimer's. Patients with mild to moderate Alzheimer's were enrolled.
Elan and Wyeth-Ayerst are conducting the clinical trials in the U.S. and four European countries. To date, about 360 patients have received multiple doses of AN-1792. In the Phase IIA study, 97 patients in France were dosed.
For larger companies, such a setback would be a blip on the radar screen, Mr. Hunter said. "But AN-1792 is only one of Elan's two major products going forward."
Elan's other big pipeline drug is Antegren, a multiple sclerosis treatment formulated in collaboration with Biogen Inc., but Antegren isn't expected to make it to any stage of regulatory approval in the U.S. or Europe until 2004.
Medium-term progress on Antegren is strong, Mr. Hunter said. He forecasts Elan's full-year operating profit for 2001 will be $717.5 million, up from $465.4 million in 2000. |
