Alzheimer's drug test halted

Earlier studies suggested Memryte, made by Voyager Pharmaceuticals, was effective in women, but the company faces financial trouble

Work on a promising Alzheimer's treatment is on hold while the Raleigh company developing the drug is nursing its financial ills.

Memryte, one of 10 promising Alzheimer's drugs that have attracted international attention, has been in final testing on more than 1,000 patients. Results were expected in late 2007. But Wednesday evening, Voyager Pharmaceuticals, the privately-owned Raleigh company that is developing the drug, sent shareholders a letter by e-mail saying it was stopping the tests.

"We have taken a hard look at projected costs of the trials and the difficult fundraising environment and have decided that decisive action is needed," the letter reads. "As a result, we have today decided to stop our Phase III trials in order to address ... clinical and financial issues." It was signed by Voyager CEO Patrick Smith.

The News & Observer obtained a copy of the e-mail Thursday. Voyager confirmed the contents of the letter but refused to comment, saying it speaks for itself.

Smith's letter also stated that an "adjustment in the Voyager workforce is being carried out" along with an executive salary cut. No further details were given, but the company has about 30 employees.

Like many small drug development companies in the Triangle, Voyager lacks product revenue and relies on investments to pay operating expenses.

The company, which was founded in 2001, raised more $60 million from nearly 500 small investors.

Its financial troubles arose after the company abruptly canceled plans last December to raise as much as $100 million by selling stock to the public. The failed initial public offering triggered a lawsuit that revealed the three founders had a history of bumps and scrapes with investors. As expenses for the clinical trials mounted, Voyager went looking for a corporate sponsor in the pharmaceutical industry or at least $35 million in venture capital.

But the fund-raising attempts were unsuccessful.

In addition to blaming the "fund raising environment," Smith's letter stated that potential pharmaceutical partners and investors were not happy with the way Memryte was tested.

The drug's early test results were mixed. Data from two small studies suggested that Memryte boosts the effects of approved Alzheimer's drugs in women. The drug didn't work as well in men.

It also didn't help that Memryte's development is based on the unconventional theory that human reproductive hormones play a role in the progression of Alzheimer's.

The company still hopes to find corporate or institutional investors to start two new clinical trials in about 18 months, Smith told shareholders in his letter. But the trials would likely be smaller and focus on women.

Voyager is counting on the fact that Alzheimer's is a disease with many unknowns where convention doesn't count for much. Not even the dominant theory behind Alzheimer's drug research has been proven.

"You never know whether an unconventional approach will bear fruit," said Dr. Samuel Gandy, a neurology professor at Thomas Jefferson University in Philadelphia who leads the Alzheimer's Association's medical and scientific advisory council.

"It's always bad to see these trials interrupted," Gandy said. "They are the only way to determine whether a prospective medicine is effective."

Another of the drugs in final testing is also unconventional. GlaxoSmithKline scientists in Research Triangle Park are researching how well the approved diabetes drug rosiglitazone works as an Alzheimer's treatment.

"We can always be wrong," Gandy said. "[Rosiglitazone] is very promising, but it doesn't fit conventional wisdom either."

Voyager's unusual approach is exactly what prompted Jim Walton to inquire about Memryte. The retired Motorola executive who lives in Raleigh tried unsuccessfully to get his wife, Thelma, into one of Voyager's clinical trials.

Walton said he is very disappointed that Voyager stopped the trials. "They were on to something," he said.