Dec. 18 (Bloomberg) -- Epix Pharmaceuticals Inc., the developer of an experimental drug for Alzheimer's disease, had a record gain on the Nasdaq Stock Market after its treatment improved memory and thinking skills in a study.

The medication helped a group of 10 patients improve by an average of 5.7 points on a cognitive score after two weeks, compared with a 0.2 point decline for 10 others on placebo, Epix said today in a statement. The drug, PRX-03140, was safe and didn't cause nausea, a side effect of other medications.

The benefit was among the best ever in an Alzheimer's trial, although it must be sustained in a larger group, said Paul Solomon, a neuropsychologist at Williams College in Williamstown, Massachusetts. The disease, a progressive loss of memory and thinking, affects more than 5 million Americans, according to the Alzheimer's Association. It has no cure.

``This is a drug with promise, and it needs further investigation,'' said Solomon, who wasn't involved in the study.

Epix rose $1.05, or 35 percent, to $4.02 in composite trading at 4 p.m. New York time, it's biggest one-day gain since it went public in 1997. The Lexington, Massachusetts-based company previously gained 34 percent on July 11, 2003, after a treatment for vascular disease succeeded in a clinical trial.

The drug is designed to be taken daily. The pill works unlike any marketed Alzheimer's drug, by stimulating production of a neurotransmitter in the brain called acetylcholine, the company said.

Aricept Combo

The trial enrolled a total of 80 patients, 50 of whom took the Epix drug in combination with Pfizer Inc.'s Aricept. The Epix treatment failed to help when used in that combination, yet appeared to offer greater benefits on its own, researchers said.

The improvement was measured in a scoring system called ADAS-cog, which has been used to establish effectiveness of drugs approved by the U.S. Food and Drug Administration. To form a score, doctors test patients on memory, ability to do math, form sentences, or other mental tasks, said Michael Kauffman, Epix's chief executive officer, in a telephone interview.

Aricept usually improves the cognitive score by 2.5 to 3.5 points after six months, Kauffman said. The drug, first approved in December 1996, generated $358 million in sales in 2006, Pfizer said. Tokyo-based Eisai Co., which licensed the drug to Pfizer for joint marketing in some countries, had worldwide sales of the drug of $2.16 billion in the year ended in March.

The Epix drug showed greater benefit after two weeks, without Aricept's key side effect, nausea. Alzheimer's patients with mild to moderate disease tend to lose 7 to 8 cognitive points a year on a 70-point scale if untreated, meaning the drug could stop almost a year of decline, Solomon said.

``We were pretty blown away by the results,'' Kauffman said.

Second Trial

Epix owns the drug, although London-based GlaxoSmithKline Plc has a co-development option if the treatment shows promise in a subsequent study, Kauffman said. Epix plans to begin another study in the first half of 2008, in the second of three phases of development usually required for regulatory approval, Kauffman said.

The other notable finding against Alzheimer's in the past year was for Medivation Inc.'s Dimebon, Solomon said. That drug helped boost cognition scores by 6.9 points compared with a placebo after one year, in a study of 183 patients. The company, based in San Francisco, plans to start a late-stage clinical trial in 2008 to confirm the finding.

To contact the reporter on this story: Luke Timmerman in San Francisco at ltimmerman@bloomberg.net

Last Updated: December 18, 2007 16:21 EST