One of Japan's top pharmaceutical companies, Eisai (OTC: ESALY.PK), has withdrawn its application to get its Alzheimer's drug, Aricept, approved for severe cases of the disease in Europe.

Aricept, the top-selling treatment for mild to moderate symptoms of Alzheimer's in most countries around the world, is also permitted for treatment of moderate to severe iterations in the U.S., India, New Zealand, and the Philippines.

There's no cure for Alzheimer's, but Aricept and other such treatments, like Forest Labs' (NYSE:FRX) Namenda, delay its progression by allowing for improved cognitive ability. Co-marketed with Pfizer (NYSE:PFE), Aricept is currently the only drug that is authorized to treat the full spectrum of Alzheimer's symptoms.

Eisai has been under assault on a number of fronts lately. British health regulators at the National Institute for Health and Clinical Excellence have decided to stop paying for various Alzheimer's drugs because they're too expensive. Eisai, Pfizer, and Forest Labs, along with Johnson & Johnson (NYSE:JNJ) and Novartis (NYSE:NVS) (among others), have said they will challenge the ruling.

Now Eisai may have trouble expanding Aricept's use in Europe. Regulators there want to see more data showing the drug leads to improvement in daily-life activities in patients with severe forms of dementia. That was part of the rationale behind England's NICE refusing to pay for treatments - the agency said there was not enough benefit for the cost to the health-care system. Europe's regulators, however, were satisfied with Aricept's ability to improve cognition.

While Eisai has withdrawn the application, it says that it will discuss the matter with the authorities for possible resubmission. The company originally had some technical deficiencies with its FDA application to expand treatment, but was able to correct them and successfully resubmit it for approval. Whether it can or will do so in Europe remains to be seen.

Although Eisai says the withdrawal will not affect its upcoming earnings report, it will need to expand the markets in which Aricept is used if it wants to continue growing. Patent protection will be expiring within a few years, which is noteworthy since this is a blockbuster drug that accounts for more than a third of Eisai's revenue.

It may not have been a body blow to Eisai, but the application withdrawal came at a particularly inopportune time.

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Fool contributor Rich Duprey owns shares of Eisai but does not own any of the other stocks mentioned in this article. You can see his holdings here. Pfizer is an Inside Value selection. The Motley Fool has a disclosure policy.