A much touted potential Alzheimer’s treatment has failed to show any impact on the disease in an important clinical trial, Pfizer announced yesterday.

Latrepirdine (dimebon) had seemed promising enough for the company to enter into a $225 million deal with the drug’s developer Medivation in 2008. However, in a phase three trial of 598 patients, no significant improvements were seen in those taking latrepirdine compared with those taking placebo.

“The results from the CONNECTION study are unexpected, and we are disappointed for the Alzheimer’s community,” says David Hung, president and CEO of Medivation (press release).

Medivation’s share price crashed after the announcement (Reuters, Options Insider). The share price graph certainly looks grim (a similar spike and fall can be seen either side of the deal with Pfizer in 2008).

Steve Brozak, an analyst at WBB Securities told AP that failures at this stage are “unusual in something that they have such high hopes for”. Pfizer says it is evaluating the data from this trial after which it will consider what to do with latrepirdine.

“I’m really not sure if there’s a way forward for this drug,” says chemist Derek Lowe, on his In the Pipeline blog. “When you go to a larger, more well-controlled trial and revert back to baseline, it’s hard to make a case for continued development. Pfizer still has a lot of money and a lot of desire to find a good Alzheimer’s drug. But I don’t think they’ll be in the mood to spend much more of it here.”

The Wall Street Journal’s Heard on the Street column also chips in with this:

Pfizer investors might be tempted to shrug off the failure. After all, it cost the pharmaceutical company an initial $225 million to join the partnership in 2008. Pfizer’s market capitalization is $140 billion. But what is troubling is how much Medivation was able to take advantage of a drug that was miles from being marketed.

…

While Pfizer’s investment is likely sunk, some Medivation executives managed to take advantage of the stock’s glory days. Just two weeks ago, Medivation Chief Financial Officer Patrick Machado sold 22% of his stake for $1.1 million, outside his scheduled divestment plan.