Medivation's Dimebon fails Phase III for Alzheimer's, shares collapse

Medivation announced this morning that its pivotal, late-stage trial for the Alzheimer's drug Dimebon failed to hit its co-primary and secondary endpoints, setting the stage for a savage and immediate response from investors who had bet on success. Medivation's shares (MDVN) swiftly plunged 68 percent on the news.

In one of the most closely watched pivotal trials in biotechnology, Dimebon failed to demonstrate a statistically significant response compared with placebo. "The results from the CONNECTION study are unexpected, and we are disappointed for the Alzheimer's community," says CEO Dr. David Hung.

Pfizer is likely to be even more disappointed. The pharma giant provided Medivation with a $225 million upfront payment to license the therapy, with a half billion dollars in milestones laid along a path to approval. Now it has a drug that performs no better than a placebo, which will spark fresh questions about the company's ability to advance significant new drugs to the market.

Dimebon has inspired both fierce support and even fiercer skepticism, in part because of the murky science that surrounds Alzheimer's. There's still no consensus on what triggers the disease and certainly no compelling treatments for it. But because Dimebon has already been in use as an allergy treatment in Russia and has a clean safety record to date, a number of analysts believed that the FDA would have been inclined to approve it with even modest signs of efficacy.

Dr. Mark Smith, a professor of pathology at Case Western Reserve University who has worked as a consultant for Medivation, tells the Financial Times earlier that weak results in Phase III would trigger a debate over the cost benefit analysis, but if the data were even half as good as the results seen in a Russian clinical trial, then virtually all patients would be clamoring for it.

This morning, weak results would have been considered a godsend at Medivation.

- here's the press release