(Adds comments from analysts, CEO, and details) By Ransdell Pierson and Toni Clarke NEW YORK, June 11 (Reuters) - Medivation Inc. <MDVN.O> said on Monday that a small trial of its experimental Alzheimer's drug prevented key symptoms of the disease from worsening over the period of a year, lifting the company's shares 26 percent. A mid-stage study of 183 patients with mild to moderate Alzheimer's who took the drug, Dimebon, experienced a significant benefit compared with those taking a placebo as measured by overall cognitive functioning, activities of daily living and behavioral problems. "These data demonstrate that, as a group, Dimebon-treated patients stabilized for a full year, whereas placebo-treated patients declined at the expected rate," said Dr. Rachelle Doody, an Alzheimer's researcher from Baylor College of Medicine in Houston, who led the trial. Medivation said the most frequently reported adverse events among patients receiving the drug were dry mouth and sweating. However, roughly 32 percent of patients dropped out of the trial, similar to the 37 percent dropout rate among patients taking the placebo. "While the data are positive and unprecedented, the dropout rate may be a concern in a larger study," said Elemer Piros, an analyst at Rodman & Renshaw. He said the company aims to seek approval for the medicine as an Alzheimer's treatment in 2010. One group of patients received oral doses of Dimebon three times a day, while another group took placebo, for six months. A total of 134 patients then agreed to continue treatment for up to 12 months in the same treatment groups -- 120 of whom completed the study. "I consider these efficacy data to be noteworthy because they show an overall treatment benefit that is consistent, robust and larger at twelve months than at six," said Jeffrey Cummings, director of the Alzheimer's Disease Center at the University of California, Los Angeles, in a statement. But some analysts are more cautious. "I feel that they are overselling what they've got and the market is buying," said Dr. Harry Tracy, publisher of the monthly journal NeuroInvestment. "The company needs to show in a much larger trial that Dimebon really does separate itself out from the other Alzheimer's drugs, none of which have shown an ability to alter disease progression in the long run." Dr. David Hung, Medivation's chief executive, said the drug was developed as an antihistamine in Russia, where the trials were conducted, but appeared to be protecting brain cells from damage. "We prevent the amyloid from killing the neuron," Hung said in an interview, referring to amyloid protein, which forms plaques in the brain that are suspected to be a leading cause of Alzheimer's disease. The drug works in a different way from cholinesterase inhibitors such as Pfizer Inc.'s <PFE.N> Aricept, which do not attack amyloid protein or plaque. Medivation, which aims to begin late-stage trials of the drug next year, plans to present its latest results on Tuesday at an Alzheimer's Association conference in Washington. Shares of the San Francisco-based company were up $3.59, or 22.2 percent, to $19.77, after earlier on Monday rising to $21.85, past its 52-week high of $20.50, on the Nasdaq. (Additional reporting by Maggie Fox)
