Elan Corp and Wyeth are discontinuing tests of the highest dose of their investigational Alzheimer's drug, bapineuzumab, due to safety risks.

The companies said that they are pulling the highest of three dosing regimens, 2.0 mg/kg, in the two ongoing Phase III studies of bapineuzumab in patients with mild to moderate Alzheimer’s who do not carry the apolipoprotein E4 allele. ApoE4 is a known genetic risk factor for development of AD.

The decision follows a review of cases of vasogenic oedema, the build-up of fluid in the brain, by the study’s independent Safety Monitoring Committee. That review “made it clear that continued development of the highest dose was not advisable”, said Elan’s president Carlos Paya.

The 0.5 mg/kg and 1.0 mg/kg doses in these two late-stage trials will continue as planned, Elan said, noting that this decision “has no impact on two other ongoing studies”, which are testing a single 0.5 mg/kg dose of bapineuzumab in patients who do carry the ApoE4 allele.

Elan shares fell around 5% and Ian Hunter, an analyst at Dublin-based stockbroker Goodbody, said that the reduction to two doses “limits the chances of evaluating the true efficacy of the drug”. As such, “we are reducing our probability that the drug will get to market to 30% from 70% - in line with a Phase II probability”, he added.

Mr Hunter added that “this is an unfortunate blow to Elan” at a time when it is trying to raise cash through asset sales and/or by encouraging a minority investment”. The firm is looking to improve both short-term cashflow and the potential to repay the $1.1 billion notes due in 2011.

The analyst concluded by saying he believes that currently the company has a 50:50 chance of meeting its 2011 debt obligation, and has changed his recommendation on the stock to ‘sell’ from ‘add”.