Pfizer (NYSE: PFE), Johnson & Johnson (NYSE: JNJ), and Elan's (NYSE: ELN) gamble in Alzheimer's disease has failed. For now.

You can pretty much call any clinical trial in Alzheimer's disease a gamble, but that goes triple for bapineuzumab. Wyeth and Elan, which turned into Pfizer, J&J, and Elan through an acquisition and a license, started the phase 3 trials before the phase 2 trial was complete and the data was a little shaky.

The results of the first of those phase 3 trials were revealed yesterday, and there doesn't seem to be anything good to spin out of it. The drug didn't meet its co-primary endpoints of increasing cognitive and functional performance compared to placebo.

And here's more evidence that the companies are convinced that the drug is useless: There was a follow-on extension that participants could enroll in, but the companies have cancelled it because of the lack of efficacy.

There are still three more phase 3 trials. One more is designed similarly to the one that just failed, except it's being performed primarily outside of North America. There's no biologic reason to think that the drug might work better on different nationalities, so investors shouldn't expect that one to work.

The only hope for bapineuzumab is in the other two trials, which enrolled patients who are non-carriers of ApoE4. Patients with that genetic difference seemed to perform a little better than ApoE4 carriers in the phase 2 trial, but the data were complex and rife with ambiguities. Results for one of those trials are due out later this summer.

Some will say these studies and other Alzheimer's disease trials, like the ones Eli Lilly (NYSE: LLY) is running on solanezumab, are a waste of money. The graveyard of drugs used to treat Alzheimer's disease is full of examples: Medivation (Nasdaq: MDVN) and Pfizer's Dimebon, Lilly's semagacestat, and Myriad Genetics' Flurizan, just to name a few.

But the payoff is huge: An Alzheimer's disease drug that shows any effect will be an instant blockbuster. Who can blame the companies for taking a flyer? Investors just need to realize that it's a big gamble. Based on the 15% drop in Elan today, it appears investors didn't realize they were in a casino.

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