) recently initiated a phase II placebo-controlled, safety and
efficacy study with oral ELND005. ELND005 is being developed as an
adjunctive maintenance treatment in patients suffering from bipolar
I disorder (BPD 1) to lengthen the time period between mood
ELND005 is also being developed for the treatment of Alzheimer's
disease. In 2006, Elan had entered into an exclusive, worldwide
collaboration agreement with
Transition Therapeutics, Inc.
(TTHI) to jointly develop and commercialize ELND005.
In August 2010, Elan and Transition Therapeutics reported data
from a mid-stage trial on ELND005 for Alzheimer's disease. The
companies presented positive safety and tolerability data on
ELND005 taken twice-daily for about 18 months. However, the trial's
cognitive and functional co-primary endpoints failed to achieve
Elan and Transition Therapeutics modified their agreement in
2010, following which Transition Therapeutics stopped funding the
candidate's development and commercialization and has given up its
30% ownership of the candidate to Elan. Elan paid Transition
Therapeutics $9.0 million in January 2011. However, Elan will no
longer be required to pay the previously stipulated $25 million as
a milestone payment on the commencement of the phase III study of
The company will be making a one-time clinical milestone payment
of $11 million to Transition Therapeutics for the first patient
dosing in the BPD 1 study.
We remind investors that Elan recently decided to split into two
separate publicly traded companies. While one company will focus on
drug discovery, the other, which will retain the company name, will
have Tysabri (co-marketed with
Biogen Idec Inc.
)), ELND005 (phase II) and Elan's interest in
Johnson & Johnson
) Janssen Alzheimer Immunotherapy. The company which will focus on
drug discovery will be named Neotope Biosciences. The split is
expected to occur by year end.
We currently have a Neutral recommendation on Elan. The stock
carries a Zacks #3 Rank (Hold Sell rating) in the short run.
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