Danish company Lundbeck has seen its second quarter profits plummet by 52% in the face of terminating Alzheimer’s compound Flurizan.

The company announced in its financial report this week that net profit for the period was down 52% from the previous year’s period to 240 million Danish Kroner ($48 million).

The dismal results follow the Phase III trial failure of Alzheimer’s disease drug Flurizan (tarenflurbil). The results of the trial were released in June and saw shares drop 10% at one time following the news.

Lundbeck recorded a write-down of 481 million Danish Kroner ($96 million) after Flurizan development was discontinued based on the trial data.

The drug – designed to inhibit the Gamma-secretase enzyme necessary for the production of amyloid-beta peptide in the brain, believed to initiate tissue damage in Alzheimer’s – had been successful in Phase II trials in delaying the disability of the disease. At the time, the drug had been described as having “an attractive therapeutic and safety profile”.

Unfortunately for Lundbeck and drug licenser Myriad Genetics, the Phase III trials “did not correspond to the data observed in clinical Phase II patients with mild Alzheimer’s disease”.

Both companies have since investigated the data and decided to discontinue development of the compound, which Myriad had already spent $60 million developing.

Lundbeck had only acquired the European rights for Flurizan in May – paying out $100 million for the license.

The idea was for Lundbeck to use the drug to boost profits when the patent on the company’s current blockbuster Cipralex/Lexapro (escitalopram) expired in 2012. Already, the company is facing pending patent trials over the antidepressant in Australia, Canada, France, the Netherlands, the UK, Germany, the US and Austria.

With patent expiration looming, Lundbeck has also announced the plan to reduce its escitalopram inventories at US marketer Forest Laboratories. Shipments will be cut back in the second half of this year and will result in lower earnings from Lexapro for Lundbeck in 2008.

Not all doom
Despite the gloom, the financial report showed quarterly revenue had increased by 12% to 2.9 billion Danish Kroner ($581 million) and, excluding the Flurizan write-down, profit from operations rose 22% relative to the same period last year.

“We still have a healthy business with strong growth in revenue as well as earnings driven by our products consistently winning market shares . . . Lundbeck aims to consistently develop and market pharmaceuticals to treat the many uncovered needs that patients with disorders of the brain have to endure today,” Lundbeck president and chief executive Ulf Wiinberg said.