Alzheimer’s disease remains one of the leading causes of death, and yet the nature of the disease makes finding a cure elusive. But that’s not for a lack of effort. A 2021 report by research firm Research and Markets predicts that the global Alzheimer’s disease market will be worth $9.4 billion by 2027. This assumes a compound annual growth rate of 6.8% between 2020 and 2027.
Not surprisingly, there are several companies involved in the development of drugs and therapies. And the companies that can successfully bring a solution to market will benefit. This article takes a look at three names that buy-and-hold investors might consider.
It hasn’t been that long since biogen (NASDAQ:BIIB) stock was under pressure after the FDA granted controversial endorsement of its lead drug candidate, Aducanumab. This came after a U.S. Food & Drug Administration advisory panel recommended not approving Aducanumab.
The question is whether Aducanumab can deliver the expected results. Aducanumab is designed to reduce the formation of amyloid plaques. This is considered a major cause of Alzheimer’s disease. However, the limited ability of drugs to reduce these plaques has cast some doubt on the role of amyloid plaque in the treatment of Alzheimer’s disease.
However, recent Phase 3 results for another Biogen candidate, Lecanemab, provided encoappealing results that are renewing interest in this treatment area. According to Biogen’s website, Lecanemab is “an antibody that binds to amyloid, which could reduce its presence in the brain and potentially slow disease progression.”
Biogen is developing the drug in collaboration with the Japanese pharmaceutical company Eisai – and the profits for Lecanemab will be split 50/50 between the two companies. Investors should also pay attention to Biogen’s extensive pipeline of drugs in various stages of clinical trials.
Eli Lilly (NYSE:LLY) was one of the pioneers in Alzheimer’s disease research and has sponsored more than 70 studies on Alzheimer’s disease and mild cognitive impairment (MCI). The company will benefit from Lecanemab’s recent results because its own lead candidate, Donanemab, is designed with the same end goal, which is to reduce the build-up of beta-amyloid plaque.
The company received a breakthrough therapy designation from the FDA in 2021, allowing the company to accelerate the time for Donanemab to reach the market. That remains to be seen. Eli Lilly expects to hear from the FDA sometime in early 2023.
Another reason to consider LLY stock is that the company is an established company with many drugs commercially available alongside a deep pipeline. For less risk-tolerant investors, this helps take some of Eli Lilly’s risk away, as it doesn’t rely on the success of a single candidate.
For risk tolerant investors looking to take a chance on a clinical stage company, Cassava Sciences (NASDAQ:SAVA) presents an intriguing opportunity. As I noted above, drug efficacy to clear amyloid plaque is ongoing. And that means there is an opportunity for companies that do things differently.
That’s where Cassava comes in. The company’s research focuses on why the amyloid plaque builds up in the first place. The company’s lead candidate, Simufilam, has shown promising results in Phase 2 trials. According to the company’s website, “Simufilam is a proprietary, small molecule (oral) drug that restores the normal form and function of altered filamin A (FLNA), a rearing protein, in the brain.”
The drug is currently in Phase 3 clinical trials and the company hopes to release the results by the third quarter 2023. That means regulatory approval is still a while away. But for investors with a long time horizon, the SAVA stock is promising.