By Lisa Seachrist

Washington Editor

NeoTherapeutics Inc. has initiated a large-scale Phase II/III clinical study of Neotrofin, a small-molecule drug being developed for the treatment of Alzheimer's disease.

The study, which will be conducted entirely outside the U.S., will test four different dosages of Neotrofin in more than 1,500 patients suffering from mild to moderate Alzheimer's disease. The trial will examine the safety and efficacy of the drug over six months of treatment. The Irvine, Calif.-based company expects the study to be completed by the end of 2001.

"We are very excited about the initiation of this trial," said Michelle Glasky, vice president of scientific affairs for NeoTherapeutics. "It's an important study for the company because we are really expanding into Europe."

Neotrofin is a small-molecule drug that stimulates the production of a number of nerve growth factors. In animal models, the drug even demonstrates the ability to sprout new nerves. NeoTherapeutics is developing the drug for nerve repair and regeneration. To date, early human clinical studies have demonstrated the drug enhances memory and behavioral function in patients with Alzheimer's disease.

"The physicians participating in the study are very excited about Neotrofin's effects," Glasky said.

The Phase II/III study will be conducted at 165 sites in 17 countries around the world. The endpoint of the study is memory improvement on an Alzheimer's memory assessment scale and a global evaluation scale.

The doses administered will range from 25 milligrams to 150 milligrams and be pitted against a placebo. The dosages were determined from an interim analysis of a worldwide Phase IIb study. Final results from the Phase IIb study should be available by the second or third quarter this year.

The company also has a Phase IIb study ongoing in the U.S. involving 400 patients. That study is expected to be completed by the end of this year. NeoTherapeutics completed a $10 million private placement last fall to fund the U.S. study. (See BioWorld Today, Nov. 23, 1999, p.1.) Glasky said an additional financing was in the works to cover the costs of the Phase II/III study.

"We wouldn't initiate the clinical trial if we weren't certain we could fund it," Glasky said.

Glasky said the company hoped to start a Phase III program in the United States sometime next year pending discussions with FDA.

The company's stock (NASDAQ:NEOT) closed Wednesday at $18.50 a share, down 50 cents.