ALZHEIMER'S HOPE; AMGEN, HARVARD TEAMS FIND KEY TO ILLNESS.

Byline: Jason Z. Cohen Staff Writer

Researchers at biotech giant Amgen Inc. have isolated a compound that might be the cause of Alzheimer's disease and are trying to create a drug to inhibit its production and slow or reverse the disease's effects.

In an article to be published in today's issue of the journal Science, researchers for Thousand Oaks-based Amgen and the Harvard Medical School discuss their discovery of the protein, known as beta-site APP-cleaving enzyme, or BACE.

Scientists praised the discovery Thursday as a monumental breakthrough in their research and said it could eventually lead to a cure for Alzheimer's, a degenerative neurological disease which affects 4 million people annually.

``A lot of people in the Alzheimer's community are referring to this discovery as the Holy Grail of Alzheimer's Disease,'' said Amgen spokesman David Kaye. ``It's a discovery related to the fundamental understanding of the disease. This enzyme appears to be central to the formation of plaque in brains of Alzheimer's patients.''

For more than a decade, Alzheimer's researchers have been hunting for two unknown enzymes they presumed existed but could never pinpoint. The Amgen researchers have finally identified one of them.

The enzyme is a component in a substance that builds up in the brains of Alzheimer's patients and causes the formation of plaques that cause the neurological degeneration of Alzheimer's Disease.

Despite the finding, it could be 8 to 10 years before a drug is put on the market, Kaye said, assuming one can be found that is effective and safe to administer to humans. It also must receive approval from the federal Food and Drug Administration.

``This discovery is a target for a drug; this is not a drug in and of itself,'' Kaye said. ``We now need to find a drug that can inhibit the buildup and the threat of the enzyme.''

The search for the cause of Alzheimer's has been so frustrating in the past that false claims of success had dampened hopes.

But experts say that the new work has passed crucial tests of authenticity.

Dr. Sangram Sisodia, chairman of the department of neurobiology, pharmacology and physiology at the University of Chicago, told the New York Times that when he first heard of the Amgen result, he dismissed it, saying, ``It's junk. It has been junk after junk for 12 years.''

But, he added, ``When I read the paper, I was overwhelmed. The set of experiments in this paper was a tour de force.''

Analyst Douglas Christopher of Los Angeles-based Crowell Weedon & Co. said the development of a new Alzheimer's drug would be a financial feather in Amgen's cap.

But such a development is so uncertain and so far in the future that its value to investors is negligible, he said.

``It's definitely good to have claim to something that substantial,'' Christopher said. ``We're just trying to kind of look at their existing products and markets. I approach it from the valuation and the financial perspective.''

That perspective fared rather poorly Thursday. Amgen's stock ended the trading day down $6 per share to $80.125 on 18.2 million shares traded, roughly six times the normal volume.

The 7 percent price drop was fueled by Amgen's announcement late Wednesday that it will increase its spending for research and development in coming quarters, cutting into future earnings.

The company also had announced that quarterly earnings were better than Wall Street estimated by 1 cent per share and that the company's stock would split 2-for-1 in November.

Kaye said the price decrease was due to overreaction on the part of investors.

Cunningham, who rates the stock a ``buy,'' said a company such as Amgen that is increasing its research budget is a better buy for the long-term investor than for the day trader or the momentum investor.

``One thing they've demonstrated is quality in science,'' he said. ``If they bring something to the table, you know you're seeing everything.''

Amgen is the nation's largest - and most successful - biotech company, largely on the strength of two drugs: Neupogen, which stimulates white blood cell production; and Epogen, which stimulates red blood cell production. Both have annual revenues of $1 billion.