Pfizer buys rights to Alzheimer’s drug

Pfizer Inc. said Wednesday that it had agreed to buy the rights to Medivation Inc.’s experimental Alzheimer’s treatment.

Medivation of San Francisco will get $225 million up front for rights to the treatment, called Dimebon, and as much as $500 million tied to the drug’s progress reaching the market, the companies said.

The agreement may help Pfizer, maker of the Alzheimer’s pill Aricept, leap forward in the race to develop new treatments for the disease, the most common cause of dementia. It’s a market that could grow to $20 billion by 2012, analysts say. Pfizer is hunting for new drugs to offset generic competition by 2011 to its cholesterol pill Lipitor, the world’s top-selling medicine with $12.7 billion in sales last year.

Pfizer will pay for 60% of U.S. development and marketing costs and will be responsible for sales outside the U.S. Medivation was founded in 2003 and has 40 employees. Dimebon, in final tests needed for U.S. approval, was once sold in Russia as an allergy drug and is Medivation’s lead product.

Medivation shares rose $3, or 11.5%, to $29.03. Pfizer, based in New York, rose 3 cents to $19.20.

In a study published last July in the British medical journal Lancet, Dimebon helped boost Alzheimer’s patients’ ability to track dates, understand instructions, follow commands, memorize a list of words and perform simple tasks such as copying drawings or addressing an envelope.

The drug was tested in 183 Alzheimer’s patients in Russia who received either Dimebon or a placebo three times a day for six months. Scientists say the medicine may work by restoring or creating new brain cell connections.

Wyeth and Elan Corp. are testing an Alzheimer’s treatment, though a study this year raised questions about the drug’s safety.

Eli Lilly & Co. has two Alzheimer’s drugs in final trials. Pfizer has three other drugs in early tests.