German drugmaker Evotec saw its stock fall nearly 13% during trading yesterday, in a knee-jerk reaction to news that the firm has dropped its investigational Alzheimer’s drug EVT 301 on safety issues. Shares eventually settled down 3.6% at 3.20 euros, after investors had had time to digest the implications of the move.

A one-month safety and tolerability study of EVT 301 - an orally-active, selective and reversible inhibitor of monoamine oxidase B - unveiled several cases of abnormal elevated liver function tests in the elderly group. All cases reversed spontaneously, and the effect was not observed in the young healthy volunteer group, the group said.

The findings have caused Evotec to terminate not only the trial, but the whole programme as well. But, on the up side, the move has freed up 20 million euros over the next two-three years that had been put aside for Phase II development of the agent, and this can now be re-routed into other areas of R&D.

“Although advancement of this programme would have been optimal, it is better that the investment in EVT 301 has been capped now rather than after a large investment in later stage trials,” said Joern Aldag, Evotec’s Chief Executive. “We continue to believe there is ample opportunity in our current proprietary portfolio of CNS candidates, including our insomnia drug EVT 201 and the potential of EVT 101 for the treatment of Alzheimer's disease, neuropathic pain or other indications. The discontinuation of the EVT 301 programme will free up 20 million euros, which will provide us a lot of flexibility in developing our pipeline."

"Evotec continues to believe in the potential of MAO-B inhibition and its role in treating CNS related disorders,” added John Kemp, chief research and development officer at the firm. “In other respects, our pipeline is progressing well,” he stressed.