Epix Shares Jump on Alzheimer's Data

Biotechnology company Epix Pharmaceuticals Inc. said Tuesday its experimental Alzheimer's disease treatment was safe and well-tolerated in a short-term, midstage study, and helped improve memory in certain patients.

The results sent the company's stock soaring $1.56, or 53 percent, to $4.53 in morning trading. Though the drug showed mixed improvement based on dosage, the results were positive enough for the company to look forward to a longer and larger midstage study, scheduled to begin early next year.

In the Phase IIa clinical trial, 80 patients were given various doses of PRX-03140 over a two-week period. The drug proved to be safe and well-tolerated, but most dramatically, patients taking a 150-milligram oral dose of the drug each day showed significant improvement in cognitive function and memory, compared with a worsening of symptoms for patients on placebo. Patients taking a 50-milligram dose showed slight improvement.

A second arm of the study compared doses of 5 milligrams to 200 milligrams combined with Pfizer Inc.'s Alzheimer's drug Aricept. After two weeks of treatment, none of the doses' effects proved to be statistically significant.

However, Epix said significant improvements in cognitive function are not typically seen until patients have had at least 12 weeks of drug therapy, according to current standards.

"While we recognize that this is a two-week study on a relatively small population of patients, these statistically significant results, as well as the anecdotal reports we have received from study investigators and patients' families since the trial concluded, support our belief that PRX-03140 has the potential to improve memory and cognition," said Epix Chief Executive Dr. Michael G. Kauffman, in a statement.

PRX-03140 is being developed as part of a collaboration with GlaxoSmithKline, which has the option to license the drug. Epix is responsible for developing it through the "proof-of-concept" phase to show it has potential. The company likely accomplished that with the midstage results, said Cowen and Co. analyst Ian Sanderson.

In a note to clients, Sanderson said the results are encouraging, and he expects a filing with the Food and Drug Administration in 2011 if additional studies prove positive. Sales could reach $75 million in 2012, he said, reaffirming a "Neutral" rating on the stock.

The drug candidate targets the 5-HT4 receptor in the brain, and is believed to stimulate the production and release of the neurotransmitter acetylcholine. This may improve memory and cognition in Alzheimer's patients, since the brains of Alzheimer's patients have been shown to have severely diminished acetylcholine activity.

The drug also stimulates the alpha-secretase pathway, which processes certain proteins, thereby potentially slowing the disease's progression.