WASHINGTON (AP) -- Shares of Irish drugmaker Elan Corp fell continued falling Tuesday, a day after researchers announced they would halt study of the company's highly anticipated treatment for Alzheimer's disease.
On Monday Pfizer and Johnson & Johnson said Elan's experimental drug bapineuzumab was no better than placebo at slowing Alzheimer's in patients with mild to moderate disease.
Dublin-based Elan Corp. PLC, which licenses the drug to J&J, said it will take a $117.3 million charge.
Elan shares fell 10 percent Monday and continued sliding Tuesday, down 23 cents, or 2.1 percent, to $11.02 in afternoon trading. The stock is down nearly 20 percent in the year to date.
In the latest trial, bapineuzumab was tested on about 1,300 patients who lacked a gene that is associated with a greater risk of Alzheimer's. Last month Pfizer and Johnson & Johnson said the drug also didn't work on patients who do have that gene.
Current treatments for Alzheimer's can only temporarily ease symptoms of the disease, which include increasing memory loss, confusion, wandering and aggression.
Worldwide, about 35 million people already have dementia, of which Alzheimer's is the most common type. In the U.S., about 5 million have Alzheimer's. Finding a drug that could at least slow the disease has become a sort of Holy Grail in the pharmaceutical industry. A successful medicine would be guaranteed to generate billions in annual sales, given the world's aging population.
In a research note, Jefferies analyst Corey Davis said he would not be surprised if Elan starts repurchasing shares or retiring some of its $600 million in debt now that the company doesn't have to help fund development of bapineuzumab.
"The good news is that we don't see significant downside for Elan, as the inherent value for Tysabri is around $15 in our opinion and the fact that the company will not be spending any more on the program should help buoy the stock," said Davis, who rates the stock a "Buy." Tysabri is a multiple sclerosis drug Elan markets with Biogen Idec.