Pfizer Inc and Medivation, Inc announced that they have entered into an agreement to develop and commercialize Dimebon, Medivation’s investigational drug for treatment of Alzheimer’s disease and Huntington’s disease.

Dimebon currently is being evaluated in an international, confirmatory Phase III trial in patients with mild-to-moderate Alzheimer’s disease

Under the terms of the agreement, Medivation will receive an up-front cash payment of $225 million. Medivation also is eligible to receive payments of up to $500 million upon the attainment of development and regulatory milestones plus additional undisclosed commercial milestone payments.

Medivation and Pfizer will collaborate on the Phase III program in Alzheimer’s disease, Huntington’s disease development and regulatory filings in the United States. The companies will share all U.S. development and commercialization expenses along with U.S. profits/losses on a 60 percent/40 percent basis, with Pfizer assuming the larger share of both expenses and profit/losses. In addition, Medivation will co-promote Dimebon to specialty physicians in the U.S.

Pfizer will have responsibility for development, regulatory and commercialization outside the U.S. and will pay Medivation tiered royalties on commercial sales outside of the U.S. The agreement is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. J.P. Morgan served as financial advisor, and Cooley Godward Kronish LLP served as legal advisor, to Medivation on this transaction.

Alzheimer’s disease leads to the death of brain cells and the loss of nerve connections in areas of the brain that govern memory, thinking and behavior. Alzheimer’s disease gradually destroys a person’s memory and ability to learn, reason, make judgments, communicate and carry-out daily activities. No currently marketed Alzheimer’s disease drug appears to stop brain cell death and prevent or restore lost nerve connections.

Dimebon is an orally-available, small molecule that has been shown to inhibit brain cell death in preclinical models relevant to Alzheimer’s disease and Huntington’s disease, making it a potential treatment for these and other neurodegenerative conditions. Based on preclinical data generated to date, Dimebon appears to improve the function of mitochondria, the energy generators in cells that play a vital role in governing brain cell health, growth and overall function. Dimebon also has been shown to stimulate the outgrowth of nerves from brain cells, or neurites, a process that is believed to play an important role in restoring or generating new brain cell connections.

Results from the first pivotal trial of Dimebon in Alzheimer’s disease showed that patients treated with Dimebon experienced statistically significant improvements compared to placebo in key aspects of the disease — memory and thinking, activities of daily living, behavior and overall function. Dimebon’s benefit over placebo continued to increase throughout the 12-month treatment period. At the end of 12 months, Dimebon-treated patients were on average functioning as well or better than they had been at the start of the study on each of 5 clinical endpoints. These results were published in the July 19, 2008 issue of The Lancet, and are noteworthy as untreated Alzheimer's patients progressively deteriorate over time in these areas.

On July 7, 2008, Medivation announced positive safety and efficacy results from its Phase 2 trial of Dimebon in Huntington’s disease, which was conducted in collaboration with the Huntington Study Group. Dimebon appeared to be well tolerated and showed statistically significant benefit versus placebo in cognition as measured by the Mini-Mental State Examination, a secondary endpoint in the study.