Pfizer and Johnson & Johnson have decided to scrap further studies of one of the most anticipated experimental drugs for Alzheimer's disease.

The drug had failed to help patients with the condition in a second high-profile clinical trial.

The companies said they would discontinue all other studies of the drug bapineuzumab in its intravenous (IV) form, including two more late stage trials and follow-up extension studies, in patients with mild to moderate Alzheimer's.

The result marked the second such late-stage failure announced in recent weeks and was especially disappointing as bapineuzumab had been given a better chance of success in the patients studied in the second trial.

If successful, bapineuzumab would have been the first drug to fight the progression of the debilitating brain disease.

Attention will now turn to solanezumab, a similar drug being developed by Eli Lilly & Co that is also considered a long-shot to succeed, but will still carry fading hopes at least until late-stage test results are released later this year.

Shares in Pfizer, J&J and Lilly all fell in after-hours trading following news of the latest disappointment.

Stock in Pfizer and J&J's partner Elan Corp also dropped more than 10% in early trade in Dublin today.

Any successful Alzheimer's treatment is likely to reap many billions of dollars in sales and industry analysts said many investors were holding shares in the companies as an insurance policy in case the drugs were to succeed.

ISI Group analyst Mark Schoenebaum, in a research note, said the scrapping of the drug would lower his Pfizer share price estimate by about $1.

J&J said it would take a charge of $300m to $400m in the third quarter related to discontinuation of the bapineuzumab Phase III clinical trial program, while Elan will take a writedown of $117.3m.

Bapineuzumab failed to improve cognitive or functional performance compared with placebo in patients who did not carry a variation of a gene called ApoE4, according to initial results of the Phase III study released late on Monday.

Pfizer on July 23 announced the failure in the first of four high-stakes trials, in patients with the ApoE4 gene variation. That trial was considered more of a long-shot based on poor results in earlier trials, but hopes were high that the data would prove more encouraging in ApoE4 non-carriers.

"We are obviously very disappointed in the outcomes of this trial. We are also saddened by the lost opportunity to provide a meaningful advance for patients afflicted with mild-to-moderate Alzheimer's disease and their caregivers," Steven Romano, head of Pfizer's Medicines Development Group, said in a statement.

While the bapineuzumab IV program is dead, the companies said a Phase II study of a subcutaneous version of the drug would continue. There were no plans at this time to study the drug in asymptomatic patients or those with an earlier stage form of the disease, a spokeswoman for Pfizer and J&J said

Many scientists and researchers believe any treatment to be successful must be used at a very early stage of the disease or even before it occurs in high-risk patients. Most had expected the late-stage studies of bapineuzumab would fail because they were treating patients whose brains were already damaged.

Dr Sam Gandy of the Alzheimer's Disease Research Center at Mount Sinai School of Medicine in New York said in an email he "would have loved to have been pleasantly surprised and wrong," but he is neither.

William Thies, chief scientific officer of the Alzheimer's Association, said despite the trial failures he was anxious to see a full analysis of the results.

"These studies are terribly important for us to learn about Alzheimer's disease, and that part of the process is just starting as the data continues to be crunched in a variety of ways," Thies said.

He said the results in mild to moderate patients would not necessarily exclude bapineuzumab from prevention trials, such as the Dominantly Inherited Alzheimer's Network (DIAN) - a consortium that enrolls people who are genetically predisposed to develop the disease at an early age. The drugs to be used in that study are expected to be announced by year's end.

"One of the strong thoughts in the field is that you really have to treat people before they become demented," said Thies, noting that is the point of the DIAN study. "Out of hand this does not automatically exclude bapineuzumab from that study."

Bapineuzumab IV is an injectable monoclonal antibody that works by attacking a protein called beta-amyloid that is believed by many researchers to be a leading cause of Alzheimer's disease.

Pfizer shares fell 3% to $23.54, J&J shares slid 1.2% to $68, and Eli Lilly shares were down 2.2% to $42.75 in extended trading.