Wyeth, Elan shares rise on Alzheimer's drug results

In midday trading, Wyeth shares rose $2.43, or more than 5 percent, to $45.50, on nearly three times average volume. Irish partner Elan saw its American Depositary Receipts gaind $1.74, or 6.4 percent, to $28.84, reaching a new 52-week high of $29.20 earlier in the session on quadruple average volume.

While the bapineuzumab study did not meet its main goal, data showed that patients lacking a certain gene were shown to benefit from the drug, compared to placebo. About 40 percent to 70 percent of Alzheimer's patients are missing the gene.

The companies have already initiated late-stage bapineuzumab studies.

Bapineuzumab has been touted by its developers as potentially the first Alzheimer's drug to slow progression of the disease, rather than just treat symptoms.

Credit Suisse analyst Catherine J. Arnold said the data in patients who lacked the specific gene was better than expected, adding that if similar results are seen in the same patient population in the late-stage trials, bapineuzumab could become a blockbuster, generating annual sales of over $1 billion.

She has an "Outperform" rating on Wyeth and $55 price target.

UBS analyst Roopesh Patel noted that while the efficacy benefit in non-carriers of the gene is encouraging, many questions remain, such as discontinuation rates, efficacy rates and instances of vasogenic edema, or fluid accumulation in the brain, in some patients. He maintained his "Neutral" rating on Wyeth and $44 price target.

Goldman Sachs analyst James Kelly said the mixed data has probably nixed the likelihood of an early Food and Drug Administration filing, though he expects a 2011 launch and a five-year sales forecast of at least $5 billion. He has a "Neutral" rating on shares.