By Trisha Roy

(Reuters) – Biohaven Pharmaceutical said on Friday it would continue testing its Alzheimer’s disease treatment in a late-stage study as the drug had passed a so-called “futility analysis”, sending shares up 4.1%.

This comes a day after rival Biogen Inc built a case for its Alzheimer’s drug, which it had previously planned to shelve on the basis of a futility analysis that suggested the trials would not meet their goals.

There are presently no approved treatments to delay the progression of the memory-robbing disease, and analysts estimate the first drugmaker to offer it will rake in billions of dollars.

Biohaven’s treatment, troriluzole, was reviewed by an independent data-monitoring committee, which said the treatment showed numerically greater benefit over placebo in measuring cognitive function or hippocampal volume assessed by magnetic resonance imaging.

Chief Executive Officer Vlad Coric said the milestone was important as troriluzole continues to be studied in four pivotal trials across multiple neurologic and neuropsychiatric disorders. Prior to the publication of the interim analysis data, SVB Leerink analyst Marc Goodman had said the drug faces less regulatory risk and would require less resources as it seeks to treat symptoms of the disease rather than the underlying cause.

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The late-stage study is being led by the Alzheimer’s Disease Cooperative Study at the University of California San Diego School of Medicine.

“Passing futility is an important milestone for troriluzole because this is an asset we think is not fully reflected in valuation and clinical success in Alzheimer’s could position the drug for a launch in a $4 billion market opportunity,” Oppenheimer analyst Esther Rajavelu said.

If the drug succeeds in the late-stage study, she said the value of stock, whose price-to-earnings ratio for the next 12 months has been trailing in the negative, could more than double.

Shares of the company were trading higher at $55.95 in early trading.

(Reporting by Trisha Roy in Bengaluru; Editing by Shinjini Ganguli and Arun Koyyur)