* Starts with similar, easier-to-study brain disorder
* Two-year trial for nerve-protecting drug to start in Q4
* Company sees study as first step in Alzheimer's testing
By Julie Steenhuysen
CHICAGO, Oct 6 (Reuters) - Faced with a competitive landscape littered with drug failures, Allon Therapeutics <NPC.TO> is taking a different approach in its efforts to develop a new Alzheimer's drug.
Instead of testing its nerve protecting-drug compound davunetide in people with Alzheimer's disease, the Canadian company is first doing studies in patients with progressive supranuclear palsy, a rare movement disorder that resembles Alzheimer's but may be easier to test.
Alzheimer's disease presents a tantalizing market for drugmakers, but it is especially difficult to study.
Getting people to sign up for Alzheimer's clinical trials has been a major challenge, and the disease progresses slowly, so it takes a long time to show a drug has any effect.
"It's been eight or eight-plus years since we've seen a new chemical entity approved in Alzheimer's disease," Allon Chief Executive Gordon McCauley said in a telephone interview.
"We kind of sat back and said is there a different way we could go forward to demonstrate that these compounds are working without taking on some of those risks associated with Alzheimer's," he said.
In August, Eli Lilly and Co <LLY.N> pulled the plug on semagacestat, one of a handful of Alzheimer's drugs left in late-stage clinical trials.
About 100 compounds are being explored in clinical trials, and some researchers fear too many high-profile failures will scare drug companies away from Alzheimer's research
McCauley said he hopes to learn from some of his peers' mishaps. That is what led him to focus on progressive supranuclear palsy, a disease that affects balance, movement and thinking. It typically strikes patients between the ages of 45 to 65, McCauley said.
ABNORMAL PROTEINS
Unlike most drugs being studied for Alzheimer's disease, which target an abnormal form of the protein beta amyloid, Allon's drug focuses on tau, another abnormal protein. Tau is abnormal in Alzheimer's and progressive supranuclear palsy or PSP.
"What is interesting to us is they all have the tau pathology," McCauley said. And their condition progresses rapidly, with the average time between diagnosis and death at just over three years.
"In extreme cases, you are a seeing 15 percent decline in brain volume per year," McCauley said.
There are also validated tests to show patients are improving, and currently there are no drugs that help people with PSP, which affects about 20,000 people in the United States and 50,000 in Europe.
All of those factors make it more likely that the company could win U.S. Food and Drug Administration approval with a single large-scale study, McCauley said.
This quarter the company plans to start a two-year, 300-person clinical trial to test the drug in PSP patients, which could represent a global market of $600 million a year, McCauley said.
Allon has both orphan drug designation, which gives the company seven years of marketing exclusivity, and fast-track status, which means the application will get an expedited review from the FDA.
"It will answer all the other questions one would want to have answered for Alzheimer's disease proper," he said.
More than 5 million Americans have Alzheimer's disease -- more than 26 million people worldwide. Current drugs only treat symptoms, but no drug arrests the steady mental decline that robs victims of the ability to think and care for themselves. (Editing by Steve Orlofsky)
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