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Elan, Wyeth Gain as Alzheimer's Drug to Start Late-Stage Trials

Shares of drug developers Wyeth and Elan jumped Monday after the companies said they plan on asking for approval to move their Alzheimer's treatment candidate bapineuzumab into late-stage studies.

Madison, N.J.-based Wyeth's stock rose $1.30, or 2.3% to $57.68 and reached a 52-week high of $57.72 shortly after trading began. Shares of Ireland-based Elan rose $2.15, or 13%, to $18.75. That stock has traded between $11.70 and $19.42 over the last 52 weeks.

The companies were waiting for Food and Drug Administration approval to move the drug candidate into Phase III clinical trials, with expectations for a start date in the second half of 2007, months ahead of the previous outlook. Results from the mid-stage, or Phase II, clinical trials aren't expected until 2008.

Citigroup analyst Andrew Swanson said he is reassessing his outlook for Elan, for which he has a $12 price target with a "sell" rating.

"If the product continues to clear its clinical development hurdles, it could be on the market by 2009, giving Elan and Wyeth a multiyear head start on most other prominent Alzheimer's therapies in development and making bapineuzumab an almost certain blockbuster," he wrote in a note to investors.

He said the decision to accelerate the program was taken from interim data of the Phase II study, which is still blinded. No details from that study have been released by the company. He maintained a cautious outlook, citing the difficulty in developing Alzheimer's treatments and lack of released data from the drug development program.

Because his current model of the company doesn't include sales of bapineuzumab, he plans to reassess it based on the new information.

Wyeth and Elan have plenty of competition in the development field. The rivals, which include Medivation, Targacept and Memory Pharmaceuticals are developing a class of drugs to stop the development of Alzheimer's.

Unlike current drugs that treat the symptoms, the new class is aimed at stopping the development of amyloid plaques in the brain and treating what is believed to be the cause of the condition.

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