Prana Biotechnology has announced plans to initiate a Phase IIb trial of its the drug PBT2, the company’s lead candidate to treat Alzheimer’s disease, before the end of 2010.

The double-blind placebo controlled trial will enroll 525 patients with mild to moderate Alzheimer’s disease and will be spread over 12 months with the key objective of measuring cognition.

The trial will test the efficacy of PBT2 in 250mg and 100mg doses.

Prana said PBT2 has so far shown positive cognitive and biomarker changes.

The company is currently discussing plans with potential investors and pharmaceutical partners to fund the trial.