No Payday In Sight for Alzheimer’s Drug Stocks

The current offerings are stopgaps, not cures

By Barry Cohen, Health Care Writer

Baby boomers fortunate enough to avoid or overcome the two biggest killers – cancer and cardiovascular disease – haven’t necessarily earned a free pass to their golden years. Still standing in the way is the dreaded possibility of Alzheimer’s.  According to Alzheimer’s Disease International, by 2050 the number of sufferers is expected to triple to more than 100 million worldwide.

Furthermore, the outlook — at least in the short term — isn’t promising for the availability of treatments that can reverse the disease’s devastating effects.  At best, the drugs on the market are stopgap measures. They can’t cure the disease. Also, their impact on the progression of Alzheimer’s is so minimal that often times neither patients nor families notice any meaningful difference. Moreover, they’re costly.

Just look at Forest Laboratories’ (NYSE:FRX) drug Namenda, which raked in sales of $1.2 billion in 2010. A recent study reported the drug was just as effective as a placebo in patients who had mild Alzheimer’s disease. Yet Namenda is used in 20% of Alzheimer’s patients, despite the fact that it was denied approval by the Food and Drug Administration for this use back in 2005.

Namenda is in one class of Alzheimer’s drugs. The other, called cholinesterase inhibitors, includes market leader Aricept, a product of Pfizer (NYSE:PFE), and Japan-based Eisai, which recorded sales of some $3 billion in 2010.

Aricept has only modest benefits at best. The same can be said for the two other commonly prescribed drugs in this class, Novartis’ (NYSE:NVS) Exelon and Johnson & Johnson (NYSE:JNJ) and Shire’s (Nasdaq:SHPGY) Reminyl. 

Despite their limited value, the current Alzheimer’s drugs are likely to continue as the mainstay treatments for the next several years. The sad fact is, they’re the best things available, and it may be a while before we see therapies that are markedly better.

That’s not to say pharmaceutical companies haven’t been trying. They have been they’re just not succeeding.  In the past decade, more than 20 therapies have failed late-stage clinical trials. Two of the most promising dropouts were Eli Lilly’s (NYSE:LLY) semagacestat and tarenflurbil from Myriad Genetics (Nasdaq:MYGN).

Lilly, along with partner Elan (NYSE:ELN), has one of three drugs in late-stage clinical trials that could reach the market in the next few years. Lilly and Elan’s anti-beta-amyloid monoclonal antibody, solanezumab, is expected to complete phase III trials in April 2012. The other hopefuls are Dimebon, a drug from Pfizer/ Medivation (Nasdaq:MDVN) and bapineuzumab, which is being co-developed by Pfizer and J&J.

Other lesser-known contenders also are in the race to capture a piece of the Alzheimer’s market, which is forecast to exceed $13 billion worldwide by 2019. 

Based on encouraging clinical test results, Baxter (NYSE:BAX) plans to begin a second Phase III trial of its intravenous treatment Gammagard.  Meanwhile Australia-based Prana Biotechnology (Nasdaq:PRANA) is optimistic about a drug it’s testing that’s designed to stop the formation of plaques in the brains of Alzheimer’s patients.

And emerging research indicates that new diabetes drugs could be an answer to the puzzle.  Novo Nordisk’s (NYSE:NVO) Victoza and Lilly’s Byetta have both both studied as part of an investigation into the link between diabetes and Alzheimer’s disease.

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