Jan. 13 (Bloomberg) -- Elan Corp. may spend an additional six months testing its experimental Alzheimer’s disease treatment, potentially delaying the introduction of its most-promising new product.

The drug is one of the first designed to attack the plaque that forms clumps in the brains of people with Alzheimer’s, affecting memory and movement. The company may use the time to gather more data on the safety and effectiveness of the medicine, bapineuzumab, which was linked to brain swelling in an earlier trial, said Carlos Paya, who in November became president in charge of strategy at Dublin-based Elan.

Elan has completed enrollment in the first of two pivotal U.S studies and will finish the second this quarter, Paya said. Right now, the discussion about the length of the trials is occurring within the company, and hasn’t been broached with either the U.S. Food and Drug Administration or partner Wyeth, Elan spokeswoman Mary Stutts said.

“There are a number of discussions going on, including what is the right duration of the trial,” Paya said Jan. 9 in a telephone interview. “The length is now 18 months. There are also some discussions of making a number of changes in the protocol: should they be 24 months, or 18 months with an extension?”

No Plans for Extension

In a Business Wire statement today, Elan said there are currently no plans to extend the duration of the late-stage trials beyond 18 months. Michael Lampe, a spokesman for Madison, New Jersey-based Wyeth, said in an interview that Elan’s statement is “reflective” of Wyeth’s stance.

Patients with a gene called ApoE4 that’s linked to the disease were more likely to develop the swelling, which receded over time. Those without the gene who received the medicine had improved mental and physical functioning, according to an earlier study. Lengthening the ongoing trial, the last of three phases of trials needed for U.S. approval, may help researchers find a way to manage the side effect, Paya said.

“It’s uncharted waters,” he said. “The more information we can get, the better. I want to make sure we have the best chance to show efficacy and safety.”

Shares of Elan rose 13 cents, or 2.1 percent, to 6.08 in Dublin trading after the company said today in a separate statement that it hired Citigroup Global Markets Inc. to explore strategic alternatives including a possible sale or merger.

Drug’s Potential

Prolonging the trial means introduction of the drug may be pushed beyond 2011, when analysts including Ian Hunter of Goodbody Stockbrokers in Dublin target the drug’s entry to the market.

“The primary reason they are thinking about extending it, and it’s far from a done deal, is to be able to make a more profound efficacy statement in the gene carriers,” said Corey Davis, an analyst at Natixis Bleichroeder in New York. “You want to be able to say to patients that if you stick it out longer, because it’s a more difficult form of the disease, you’ll get a benefit.”

In the earlier study, patients getting bapineuzumab who carried the gene started doing better than those given a placebo at the end of the trial. Lengthening the final study may show longer treatment can alter the progression of the disease, he said in a telephone interview.

The drug has the potential to be the biggest-selling medication ever, topping the $12.7 billion in annual sales for Pfizer Inc.’s cholesterol treatment Lipitor, said David Moskowitz, an analyst with Caris & Co., in a telephone interview. Those sales will come only with research success and worldwide regulatory approval, he said.

If the drug has safety issues, “then it’s a zero,” Moskowitz said.

Accelerated Development

Elan and Wyeth had accelerated the product’s development, starting the third and final phase of testing in December 2007, before the second stage was complete. The studies were designed to include about 1,000 patients each, and last for 18 months.

Another set of tests, run by Wyeth outside of the U.S., has been delayed as regulators asked to examine the results of the previous trial before enrolling patients. Those studies, which won’t be complete at the same time as Elan’s trials, won’t stop the companies from filing for U.S. approval, Paya said.

While Elan has a partner for bapineuzumab, the company is grappling with how to pay for the final, and most expensive, trials of several other medicines. Elan also must repay $1.1 billion in debt by November 2011.

Experimental Drugs

The drugmaker has two novel drugs for Alzheimer’s disease nearing the third and final stage of testing needed for regulatory approval.

The number of Elan’s experimental treatments contrasts with competitors, Paya said. The eight largest drugmakers face patent expirations and generic competition in the next four years for medicines that currently generate $139 billion in annual sales, according to IMS Health Inc., a Norwalk, Connecticut, research firm.

“There are very few companies that have that kind of innovation,” said Paya, who acknowledged that the research and development demands are burning through the company’s cash reserves. “We have more than we can deliver, or develop, and that’s what we have to juggle.”

To contact the reporter on this story: Michelle Fay Cortez in London at mcortez@bloomberg.netTrista Kelley in London at tkelley2@bloomberg.net

Last Updated: January 13, 2009 12:31 EST