Elan and Wyeth's key new drug bapineuzumab worked for a substantial proportion of Alzheimer's disease patients in an intermediate clinical trial, supporting a prior decision to start final Phase III tests.
The companies said in a joint statement today that although the drug did not achieve overall statistically significant results in the Phase II study, its benefits over placebo were significant in an important subgroup.
Shares in Dublin-based Elan rose 5.2 per cent to €18.1 on the Iseq by 2.35pm - after earlier hitting a three-year high of €19 - while Wyeth's stock gained 5.5 per cent to $45.45 in early New York trading.
The update on the antibody medicine, also known as AAB-001 was a keenly awaited biotech trial result.
If successful in final-stage trials, the medicine could become the first drug to modify the course of Alzheimer's, the most common cause of dementia, rather than just relieving its symptoms.
But the project remains high risk for Elan and its US partner Wyeth, given past failures in the Alzheimer's treatment field and looming competition from other companies, such as Eli Lilly and Myriad Genetics.
Goldman Sachs analysts estimated a 60 per cent probability of success.
Because of the design of the clinical study and the limited number of just 240 patients involved, the Phase II trial had not been expected to show overall statistical significance.
Significant and clinically meaningful benefits were, however, seen in a genetic sub-group of patients known as ApoE4 non-carriers, who make up between 40 and 70 per cent of the Alzheimer's disease population.
"Overall, these sets of data are much better than we expected, given the strong response observed in non-ApoE4 carriers," said Ian Hunter, an analyst at Goodbody Stockbrokers in Dublin, who rates Elan "add".
Jack Gorman of Davy Stockbrokers, describing the results as "very encouraging", said his price target for Elan's US shares could rise above $30 from around $29 currently.
People who carry a gene that causes their bodies to produce a substance called apolipoprotein (Apo) E4 are known to be at increased risk of developing Alzheimer's, but many patients still get the condition without this genetic variation.
Bapineuzumab aims to fight deposits called beta amyloid plaques, which are linked to the degenerative brain condition.
"The preliminary analyses of the Phase II study are a continued validation of the amyloid approach to Alzheimer's disease," Elan Chief Executive Kelly Martin said in a statement. "These results clinically support our decision to move into Phase III last year."
Detailed results will be presented at the International Conference on Alzheimer's Disease in Chicago on July 29th.