The company did note that a separate Phase 3 safety study demonstrated Dimebon’s tolerability when used alone or in combination with approved Alzheimer’s Disease medicines.  Just one more problem… if it doesn’t work it doesn’t matter how tolerable it is.  In some cases the placebo group even did better on the sugar pill, which is perhaps the worst endorsement a company can get.

Pfizer Inc. (NYSE: PFE) is also indicated lower this morning as well as it was Medivation’s partner on Dimebon for the Alzheimer’s treatment.  Shares are indicated down about 1% on the news.  Keep in mind that Pfizer has at least one other study in later stages in the fight against Alzheimer’s.

The real hit is in Medivation.  Share sare down almost 70% at $12.55 on almost 5 million shares as of 8:28 AM EST.  The prior 52-week trading range was $13.36 to $40.49.

Medivation had a market cap of $1.35 billion at yesterday’s closing bell.  Its most recent balance sheet showed north of $200 million in cash and investments.  It is now going to need every last of that cash.

This is one of those instances where everything failed to flag this.  Analysts had been positive, the charts and 52-week trading range were indicating a green light being likely, and there was not a huge imbalance between puts and calls in options trading.

JON C. OGG