Pfizer and Medivation decided to end their collaboration on the experimental drug Dimebon for Alzheimer’s disease after the drug failed a second late-stage clinical trial, effectively putting an end to the once promising drug.

The companies decided to halt development of the drug for all indications and nix an ongoing open-label extension study after it failed to meet two primary endpoints in a late-stage trial studying its efficacy in conjunction with the Alzheimer’s treatment, Aricept. The most recent failure marked the second time Dimebon failed a late-stage trial. The first failure occurred earlier in 2011 when Dimebon failed a trial studying its use in patients with Huntington’s disease.

The U.S. Centers for Disease Control and Prevention estimates that at least 5 million Americans and 18 million people worldwide have Alzheimer’s disease. No known cure exists.

Seeing a promising opportunity to address the unmet need Pfizer agreed in 2008 to a joint development and commercialization deal with Medivation that included a $225 million up-front payment and $500 million in milestones. The lucrative agreement was considered justified by the huge market potential. Effective treatments for Alzheimer’s could, by some projections, generate as much as $25 billion a year in sales.

In Dimebon, once available in the former Soviet Union as an over-the-counter anti-histamine, Medivation believed it had found a drug that could not only slow the progression of Alzheimer’s, but actually reverse the disease. And though early-stage trials showed promise, the drug sputtered out in late-stage clinical trials.

The latest trial was a 12-month global randomized, placebo-controlled study that found that Dimebon was generally well tolerated in about 1,000 enrolled patients. But the data also showed that Dimebon had no statistical advantage over a placebo, prompting the two companies to finally call it quits.

“We are disappointed in the results and the implications for Alzheimer’s disease patients and caregivers,” said David Hung, president and CEO of Medivation. “I would like to extend my sincere thanks to the patients, their physicians and study teams involved in this trial.”