2 Biotechs Taking on the $20 Billion Alzheimer's Market Full Force

Published: Feb 15, 2017

2 Biotechs Taking on the $20 Billion Alzheimer's Market Full Force February 13, 2017
By Alex Keown, BioSpace.com Breaking News Staff

CHICAGO – It’s an understatement to say that Alzheimer’s disease is a frightening condition. That’s one reason so many companies have taken a shot at developing a treatment. Although most treatments have failed in late-stage trials, such as Eli Lilly ’s solanezumab or H. Lundbeck’s idalopirdine, it’s still what disease companies want to take a shot at halting.

That continued effort is something that keen-eyed investors should take note of when considering where to place their money. The Alzheimer’s market is about $20 billion. Writing in the Motley Fool, analyst David Lang suggests investors should look at Biogen and Acadia Pharmaceuticals , two companies that are “making noteworthy strides” in developing treatments for Alzheimer’s. But, which company should investors look to when deciding to invest?

1. Acadia Pharmaceuticals

In December, Acadia announced its mid-stage drug pimavanserin to treat patients with Alzheimer’s disease psychosis hit its trial endpoints. Acadia said pimavanserin, a selective serotonin inverse agonist that targets 5-HT2A receptors, showed a statistically significant reduction in psychosis incidents. Studies suggest that 25 to 50 percent of patients diagnosed with Alzheimer’s disease may develop psychosis, commonly consisting of hallucinations and delusions. However, in its announcement, Acadia said that at week 12, the drug did not show any statistical improvement compared to placebo, which caused some analysts to question its future in Alzheimer’s disease. Pimavanserin has already been approved by the U.S. Food and Drug Administration for hallucinations and delusions associated with Parkinson’s disease psychosis, which made the company a hot-topic for acquisition speculation. It is currently marketed under the brand name Nuplazid. Shares of Acadia are slightly down this morning, trading at $37.80.

2. Biogen

Boston-based Biogen closed out 2016 with positive news regarding its anti-amyloid drug aducanumab. In November, the company announced its Phase Ib trial was successful. Data from the trial indicated that more than 100 patients showed a reduction in Alzheimer’s-related beta-amyloid plaque in the brain. Patients also continued to show a slowing of cognitive declines. While investors and Biogen executives were happy with the Phase Ib results, late-stage clinical data will not be available for a few years, which means that investors focused on Biogen’s Alzheimer’s treatment will have to bide their time.

This morning, shares of Biogen are up more than 2 percent, trading at $277.10.

One thing that could give investors a pause when looking at Biogen is that aducanumab relies on a similar mechanism of action that Eli Lilly ’s solanezumab relied upon. Sola failed its Phase III trial in 2016. That fact also gives Lang pause as well, which is why he suggests investors should look at Acadia over Biogen.

“Overall, however, I believe the combination of a large total addressable market combined with expanding indications makes Acadia a better buy for the risk-tolerant investor looking to get exposure to this potentially huge market,” Lang wrote in his Motley Fool column.

Alzheimer's disease, a type of dementia, affects 15 million people worldwide, a number that is expected to grow to 75 million by 2030 due, in part, to the lack of effective treatments. In total there are about 50 million people suffering from some form of dementia worldwide.

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