Medivation (MDVN) released disappointing Phase III results for its Alzheimer drug, known as dimebon, saying that the drug was ineffective in treating cognitive decline or behavioral disorders. The stock plunged 67% to 13 as of midday trading on Wednesday. In a joint release Medivation and its partner Pfizer (PFE) said its two Phase III trials did not meet its co-primary or secondary efficacy endpoints compared to placebo. David Hung, President and CEO of Medivation said,”The results from the CONNECTION study are unexpected and we are disappointed for the Alzheimer’s community.” Dimebon was well tolerated in a separate safety and tolerability trial.
Alzheimer Disease (AD) has proven to be on of the most difficult challenges for healthcare with over 5M individuals affected and costs approaching $627B ; even drugs currently on the market have minimal effectiveness.(see Genetic Engineering News 10/2008)
Life Science stocks have been on a tear recently with the bellwether ETF IBB reaching new 12 month highs at 88.3, 8% above early February levels and 10% better than the S&P for a 3 month period. The 5 year high for IBB is 90. The IBB had no change today but the XBI was down 1.6%.
The PBE ETF was up 0.9% as it is more diversified with biotech tools companies. The recent M&A plays with Millipore and OSI Pharmaceuticals have sparked the sector overall.
The Rayno Life Science portfolio is up 20% over a 14 month period and 5% YTD.
However the Rayno index of 35 mid-cap biopharmaceutical stocks was up 0.8% and had many winners such as Alnylam (ALNY), Cubist (CBST), Nektar (NKTR), Viropharma(VPHM).