October 22, 2008 / 11:51 AM / in 9 years

UPDATE 4-Wyeth posts flat profit, delays Alzheimer's trials

* Q3 EPS $0.90 matches forecast

* Posts flat earnings, hurt by generic Protonix

* Raises lower end of 2008 forecast

* Delays enrollment in EU Alzheimer’s trials

* Shares down 8 pct on NYSE (Adds Wyeth comment on drug setback, updates shares)

By Ransdell Pierson

NEW YORK, Oct 22 (Reuters) - Wyeth WYE.N reported flat third-quarter earnings on Wednesday and said some European regulators have asked that trials of Wyeth’s bapineuzumab drug for Alzheimer’s disease be delayed following the mixed results of a mid-stage U.S. trial.

Wyeth, whose shares fell 8 percent, said European regulators have asked that enrollment be delayed in two late- stage trials of the drug to review results from mid-stage trials and to review designs of the pair of larger planned studies.

Wyeth is developing the Alzheimer’s drug with Irish drugmaker Elan Corp ELN.NELN.I, whose shares were down 12 percent in afternoon trading on the New York Stock Exchange. The program also includes separate late-stage trials in the United States.

Joseph Mahady, Wyeth’s head of pharmaceuticals, said regulators from a number of European nations began seeking more information several weeks ago about Phase 2 trials of bapineuzumab, Wyeth’s most important experimental drug.

“We’re working hard to resolve these things,” Mahady said. “If it becomes a more protracted set of discussions, timewise it could create (a) delay.”

Mahady said Wyeth had hoped to begin the Phase 3 European trials in earnest next June after enrolling a fairly large number of patients.

“Our people feel that the trials will get going again,” he said. “We feel quite clearly the Phase 2 study demonstrated significant benefits. Phase 3 studies are designed to show efficacy and safety in a broader population.”

Researchers in July said a Phase 2 trial of bapineuzumab showed it helped some patients with a certain genetic profile, but raised the risk of a potentially serious side effect in the brain.

Despite the mixed results, Wyeth and Elan vowed to pursue larger and more costly Phase 3 trials in hopes the medicine would become the first one proven to treat the underlying cause of Alzheimer’s disease.

Leerink Swann analyst Seamus Fernandez said he believed the Wyeth selloff on Wednesday was due largely to disappointment Wyeth had failed to raise its earnings forecast.

“Expectations had been building that they’d raise guidance,” Fernandez said.

He speculated that Wyeth refrained from doing so to give itself more flexibility to take additional writedowns for bad investments in the fourth quarter, should they be necessary.

Wyeth took writedowns of $69 million in the third quarter for soured investments in Lehman Brothers and Washington Mutual.

The drugmaker said plunging sales of its now-generic Protonix ulcer drug during the quarter offset surging demand for its Enbrel arthritis drug and Prevnar vaccine for young children.

Wyeth said it earned $1.14 billion, or 84 cents per share, compared with $1.15 billion, or 84 cents per share, in the year-ago period.

Excluding special items, the company earned 90 cents per share. Analysts on average expected 90 cents per share, according to Reuters Estimates.

Wyeth said it was raising the lower end of its full-year 2008 forecast despite “a tough economy.” It now expects earnings of $3.49 to $3.55 per share, excluding special items, up from its earlier view of $3.47 to $3.55 a share.

Global company revenue rose 4 percent to $5.83 billion, but would have risen only 2 percent if not for the weak dollar, which boosts the value of overseas sales.

Wyeth shares rights with Amgen Inc AMGN.N to Enbrel in the United States and Canada. Wyeth’s share of sales in those markets rose 23 percent to $294 million. Sales in other markets, where Wyeth has exclusive rights to the drug, increased 32 percent to $697 million.

Sales of Prevnar, used to prevent infections from pneumococcal bacteria, rose 13 percent to $717 million. But Protonix, under pressure from cheaper generics since late last year, fell 45 percent to $234 million.

The company’s line of nutritional products rose 18 percent to $408 million, bolstering results.

Wyeth’s shares were down $2.88 at $31.90 in afternoon New York Stock Exchange trading. (Editing by Maureen Bavdek; Editing by Andre Grenon)

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