"Clearly, there is a gap in knowledge with the marketplace and the investors with the data," he said. "A relatively small phase 2 Alzheimer's trial is never going to be able to answer all the questions about Alzheimer's that have existed."
Shares of Elan lost about one-third of their value and were down more than $12 in early morning trade. Shares of Wyeth fell more than $5. The two companies are co-developers of the drug.
Tuesday's results showed the drug raised the risk of a potentially serious side effect, especially in people with a genetic risk of the disease, the companies said.
Twelve people with mild-to-moderate Alzheimer's, who were treated with the drug, developed a build-up of fluid in the brain called vasogenic edema, according to the study. Ten of those cases were in people who have the ApoE4 gene, which significantly raises their risk of developing Alzheimer's disease. The other two were in non-carriers of the gene.
The side effect appeared to be "strongly related" to the dose of the drug people took, said Dr. Ronald Black, assistant vice president in neuroscience research at Wyeth.
Preliminary findings released last month showed the drug failed to boost memory and functionality in most of 234 patients over 18 months.
Carriers of ApoE4, 60 percent of those who got the drug and 70 percent who got the placebo, did not show any improvement in their ability to think or function.
But in the non-carriers of ApoE4, the companies did find a statistically significant improvement in these measures.
In the phase 3 study, the companies plan to give higher doses of the drug to people who do not carry the ApoE4 gene, and a single low dose to the ApoE4 carriers.
The companies plan to meet with regulators about the final design of the four late-stage clinical trials, which will involve 4,100 patients, Black said.
--Reuters contributed to this report.
