High doses of drugs, Alzheimer's, and Elan (NYSE:ELN) just don't go well together. Elan had to drop the highest dose of bapineuzumab earlier this year and now a second drug, ELND005, will need to do the same.

Elan and partner Transition Therapeutics (NASDAQ:TTHI) announced today that they have to drop the two highest doses of ELND005 in their phase 2 trial because of an increased rate of serious adverse events in patients taking the 1,000 mg and 2,000 mg doses. Nine patients on the higher doses died, although their deaths haven't been directly linked to the drug. Yet.

Patients taking the 250 mg dose will continue in the study, but the chance of the drug working well has diminished greatly. Almost all drugs are more effective at higher doses and drug companies try to find the sweet spot where efficacy is high, but side effects haven't kicked in yet. For some drugs, that sweet spot just doesn't exist. For instance, Human Genome Sciences (NASDAQ:HGSI) had to drop the highest dose of its hepatitis C drug, Albuferon, because of safety concerns and the results of the lower dose were uninspiring.

Investors should know sometime in the latter half of next year whether the 250 mg dose worked. Whether it flops or not won't matter that much to Elan though; its near-term future will be determined by bapineuzumab and Tysabri.

The first of the phase 3 trials for bapineuzumab, which is partnered with Johnson & Johnson (NYSE:JNJ) and Pfizer (NYSE:PFE), should read out toward the end of 2010.

For multiple sclerosis drug Tysabri, Elan and partner Biogen Idec (NASDAQ:BIIB) need to get the rate of potentially deadly progressive multifocal leukoencephalopathy (PML) to a level that's acceptable to patients in order to spur on sales. They're working on ways to both diagnose whether a patient is susceptible to getting PML as well as to treat it.

Investors who think one or both of the drugs will succeed can get Elan on sale today. Shares are down 2.5% at the moment, well off the broader market indexes. Of course, Transition Therapeutics' shares are down more than 40% today. But then, it's a development-stage biotech, not an established player like Elan.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is a Inside Value pick. Johnson & Johnson is a Income Investor recommendation. The Fool has a disclosure policy.