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Prana Biotechnology (NASDAQ:PRAN), a tiny Australian company working for many years on a treatment for Alzheimer's disease [AD], announced Phase II trial results Monday that the company characterized as successful -- and the stock popped 40%-50% Tuesday.

The trial results, for those who care about these things, raise many future questions that will have to be answered by the FDA and about the future of AD drug development. That may happen when the company approaches the agency to move forward into Phase III trials.

What this company does with the FDA has enormous implications way beyond its own drug efforts.

Prana has a different approach towards Alzheimer's which is how I found them five years ago. A good deal of big pharma has aimed at reducing the secretion of amyloid proteins and failed.

Simply put, humans need these proteins and to limit their presence in the brain would require a drug that could cross the brain barrier -- and that's a non-starter. Instead, Prana aims to reduce the plaque, not the protein, by stopping the reaction between these proteins and the naturally occurring copper and zinc in the brain.

The heart of Prana's research is to commercialize what are called Metal Protein Attenuating Compounds (MPACs) to reduce or eliminate the interaction of naturally occurring metals in the body (such as copper) with amyloid proteins -- and in the process reduce or eliminate beta-amyloid creation and plaque buildup.

MPACs may also be a technology useful for the treatment of other brain disorders (i.e., Parkinson's) that could also be occurring, in part, due to the interaction of metals and amyloid proteins. Prana's research approach believes oxidation releases the key proteins, these proteins interact with a metal (naturally occurring copper in the brain being the main culprit), and this then leads to both the buildup of plaques and the release of hydrogen peroxide causing brain-cell death and reduced brain function.

In the Phase II trials, the drug (PBT-2) was safe and, as measured by two of four standard measurements (by the FDA and the industry) for the progression of Alzheimer's disease, it showed statistically significant results. The drug did not have any impact as measured by the most important test, the ADAS-cog for overall cognitive impairment. The company also reported its own measurement result showing significant reductions in a biomarker for certain amyloid beta proteins (Abeta 42) associated with AD.

It is this result that could attract a partner of some sort.

These markers are not accepted by everyone and have never been used to get a drug approval from the FDA. And that is the rub. There is a vocal minority of researchers who believes these proteins and their plaques are a symptom and not a cause of AD.

If and when the company puts forward a request to go to a Phase III trial, I can only assume it will include these markers as a secondary endpoint, perhaps a primary endpoint, of the trial.

The FDA will have to decide if this is an appropriate surrogate for efficacy. This is important because it is hard to measure the mild-to-moderate patient group that is typical in many AD trials, and everyone agrees a biological marker and measurement would be of great value to drug development and for early, pre-symptomatic diagnosis.

If Prana can get a partner, then the question is whether that partner will endorse these biomarkers as a valid endpoint and use their big pharma skills to get the FDA to accept this point of view.

There is a lot riding on the FDA in this process -- many companies are working on AD treatments and FDA acceptance of this kind of biomarker as a primary endpoint would be revolutionary! Even acceptance as a secondary endpoint for a Phase III trial would be ground breaking.

Stay tuned. This is very interesting. [Disclosure:] I have recommended PRAN in my service for many years and I own the stock.

Source: Prana Biotechnology's Alzheimer's Drug Could Challenge the FDA