Avanir Pharmaceuticals Inc. (NASDAQ: AVNR) announced positive Phase 2 results for its drug candidate AVP-923. The drug candidate is a potential new therapy for agitation and aggression in patients with Alzheimer’s disease.

Specifically, the drug candidate helps by alleviating dementia-related neuropsychiatric symptoms such as agitation and aggression. The potential impact that AVP-923 could have would be significant in terms of improving not only the patient’s life but also that of the caregiver.

Improvements were seen in a majority of the secondary endpoints, including the NPI total score (p=0.014), clinical global impression of change-agitation (p=0.0003), patient global impression of change (p=0.001) and measures of caregiver burden (p≤0.05).

The most common adverse reactions from the trial were falls, diarrhea and urinary tract infection, which occurred in less than 10% of patients. There was a low patient discontinuation rate and there were no serious adverse events that were deemed treatment related by the investigators.

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Joao Siffert, MD, chief medical officer at Avanir, had this to say about the Phase 2 results:

With no FDA approved drugs for the treatment of agitation in Alzheimer’s disease, we believe these results represent a breakthrough for patients. We are extremely excited with the prospect of bringing a potential treatment that can provide clinically meaningful relief to these patients and reduce caregiver burden. These study results represent the second neuropsychiatric disorder where AVP-923 has shown benefit and lends support for further advancement of our research programs into related disorders.

In the premarket trading following the announcement, Avanir was up as high as $9.58, marking a gain of 42.14%, from the previous close of $6.74. In regular trading, the stock continued to push higher setting new 52-week highs — with a new high of $11.18 and on a 10-times volume spike of more than 22 million shares after only 40 minutes of trading. The company has a consensus price target of 8.73. The stock has a 52-week low of $2.62 and a 52-week and multiyear high of $10.83.

24/7 Wall St. would be quick to point out that Avanir has been public for roughly 20 years. This stock reached above $15 in 2006, was above $20 and even $25 in parts of 2000 to 2001.

As a reminder, Alzheimer’s disease is one of those indications that there are no cures for, and the treatments on the market today mostly target detection and delaying the onset of symptoms. Any drug that makes major headway against Alzheimer’s disease has mega-blockbuster potential in the United States alone.

The Alzheimer’s Foundation of America lists a very scary statistic — it is estimated that as many as 5.1 million Americans may have Alzheimer’s disease, and an estimated half-million or so Americans under 65 have some form of dementia.

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