July 12 (Bloomberg) -- GlaxoSmithKline Plc’s diabetes drug Avandia failed to benefit patients with Alzheimer’s disease, according to a company-funded study.

The findings are another setback for Avandia, once the biggest-selling drug for diabetes in the world, and raise questions about the theory that Alzheimer’s is a form of diabetes of the brain. Sales of Avandia haven’t recovered since a study linked the drug to heart attacks in May 2007. It generated 805 million pounds ($1.3 billion) last year, down 40 percent from a year earlier.

Analysts and investors had hoped Avandia would effectively treat Alzheimer’s disease, and estimated it would generate as much as $300 million annually from the condition. London-based Glaxo halted worldwide development of Avandia for Alzheimer’s disease in April, Bloomberg data shows.

“We saw no efficacy in this study, or the two adjunct trials” that tested a new once-daily formulation of the drug in combination with other therapies for longer periods of time, said Michael Gold, Glaxo’s vice president of neurosciences. “There is no evidence that it works,” he said in an interview. “That doesn’t mean we shouldn’t think about other molecules.”

Insulin doesn’t work properly in the brains of patients with Alzheimer’s disease, and previous research suggested Avandia improved mental function in patients without a gene variation linked to the disease.

Six-Month Study

The six-month study of 553 patients with mild to moderate Alzheimer’s disease found Avandia failed to improve cognition, function, behavior or daily activities in people without a strong genetic predisposition. Patients taking Eisai Co.’s Aricept, the best-selling drug for the disease, fared better on tests of global function in the study, suggesting the trial was adequately designed to find a benefit.

Gold presented the study results at the International Conference on Alzheimer’s Disease in Vienna today.

Scientists have said Avandia may work in Alzheimer’s disease by better regulating sugar levels in patient’s brains, much as it helps regulate diabetics’ blood sugar. The medicine may also reduce brain inflammation and restore normal function to damaged energy centers in brain cells, researchers said.

“It’s a very big setback for this approach,” said Joseph Quinn, associate professor of neurology at Oregon Health and Sciences University. “I don’t know another drug ready to test the hypothesis.”

Quinn and other Alzheimer’s disease doctors said it’s too early to give up on drugs that regulate insulin as a way to treat the condition.

‘Strong Link’

“It would have been nice to get a positive result because this drug is already available,” said Ronald Petersen, chair of the Alzheimer’s Association’s medical and scientific advisory council. “There is still a strong link between diabetes and Alzheimer’s,” said Petersen, also director of the Alzheimer’s Disease Research Center at Mayo Clinic in Rochester, Minnesota.

In mid-stage studies, Avandia was as safe as a placebo and added about three points to the patients’ scores on the 70-point cognitive section of the Alzheimer’s Disease Assessment Scale. Patients who benefited the most from the treatment didn’t carry the APOE-4 gene variant, an indicator of susceptibility to the disease that is responsible for about half of Alzheimer’s cases.

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

Last Updated: July 12, 2009 12:40 EDT