Memory Pharma Drops on Failed Study

Memory Pharmaceuticals Shares Drop on Failed Mania Treatment Study; Analyst Downgrades Stock


NEW YORK-- Shares of Memory Pharmaceuticals Corp. fell Monday after the biotech drug maker said results of a clinical study for one of its drugs to treat bipolar mania failed to show significant effectiveness.

Memory Pharmaceuticals shares fell 97 cents, or 31 percent, to $2.16 in afternoon trading on the Nasdaq at more than double their average volume. Shares have fallen from a 52-week high of $4.94 set in February.

Results of the midstage study showed a significant number of bipolar patients given the experimental drug MEM 1003 did not reach at least a 50 percent improvement on a mania scale, or other measured targets, compared to patients given a placebo. Bipolar disorder is major mood disorder where sufferers swing between episodes of mania and depression.

As a result, Lazard Capital analyst Terence C. Flynn cut the rating on the company to "Hold" from "Buy."

Flynn had expected the drug to be effective against acute mania, but given the results, does not think the company will advance study for this condition.

Despite the company's reassurance that the drug is still being studied as a treatment for Alzheimer's disease, Flynn said that he is no longer optimistic, and removed MEM 1003 from his model.

The analyst estimated a cash per share technology value of 50 cents for MEM 1003, with $2 for the company's MEM 3454 Alzheimer's drug candidate.

MEMY is trading down over 32% (thats over 1 dollar per share) in today's late afternoon session at $2.12/share.

MEM 1003 is a neuronal L-type calcium channel modulator. L-type channels are not only essential for cardiovascular function [they are targets for high blood pressure drugs as well] but are also widely expressed in neurons, (neuro-)endocrine and sensory cells. We know that these channels contribute to memory and control of mood and drug-related behavior, as well as vision, hearing, the release of a variety of hormones and skeletal muscle contraction. By blocking L-type calcium channels, MEM 1003 may regulate the flow of calcium. Calcium inhibition may enhance cognition by re-establishing normal levels of calcium, which is essential for normal functioning of neuronal pathways.