Clinical trials can be like a tightrope over a minefield for biotech investors. Only a fraction of drugs even succeed through clinical trials to receive FDA approval.
But for those that do, the stock rewards are immense, with huge pricing power and high returns. In fact, many of the best high-potential biotech stocks are those with promising drug trials.
Biotech stocks for neurodegenerative treatments walk an even riskier tightrope. The human brain is poorly understood even by the experts, and disease treatments are fraught with peril. But as our population ages, neurodegenerative diseases are expected to affect more and more of us.
Therefore, the best neurodegenerative disease stocks to buy will be those in late clinical trials who can get their drug approved and then ride the wave of an aging population into more revenue and ever more profit.
For those willing to walk the tightrope, let’s examine together some of the best neurodegenerative disease stocks to buy.
Amylyx Pharmaceuticals (AMLX)
Amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s, is a wasting disease that degrades the body’s motor neurons. Voluntary movement becomes laborious, and life expectancy is just 2-5 years after diagnosis.
But last year, Amylyx Pharmaceuticals (NASDAQ:AMLX) achieved FDA approval for its ALS drug Relyvrio, despite not having phase 3 clinical trial results. ALS’s severity likely drove the FDA to its decision. Amylyx is already generating revenue from Relyvrio.
The FDA demanded that Amylyx promise to withdraw the drug if that trial yields negative results. Relyvrio is also approved in Canada on a conditional basis which can be withdrawn based on the trial results. Amylyx faces an uncertain future, which may be causing its stock price to be held back until that uncertainty is resolved.
Besides Relyvrio, Amylyx has nothing else in clinical trials. But if Relyvrio is an ALS success, it will not only pave the way for the worldwide roll-out, but also bolster the company’s attempts to get Relyvrio approved for other diseases.
The bottom line is that Amylyx has had a big win, but it needs to keep winning to stay in the game. If you like their science and their drug though, this is one of the most promising neurodegenerative biotech stocks to buy.
Novo Nordisk (NVO)
Novo Nordisk (NYSE:NVO) is a well-known diabetes care stock, and their weight loss drug Wegovy is also very successful.
But now Novo Nordisk is running trials to see if Wegovy can also treat Alzheimer’s disease. The trial, EVOKE, is scheduled to end in 2025. And since Wegovy was already approved for other purposes, the EVOKE trial is a phase 3 trial. Early results released during the trial could also be important clues about whether the trial will succeed or fail.
Wegovy and its other brand names Ozempic and Rybelsus are already a big hit. And Novo Nordisk has been faced with shortages due to sky-high demand. If this drug can help you lose weight and treat other diseases, it would be a smashing success.
Novo Nordisk brought in about $677 million (4.6 billion DKK) from Wegovy alone in Q1 2023. Growing fast by 225% year over year, Wegovy currently makes up about 9% of Novo Nordisk’s total revenue.
With Q1 2023 revenue of about $8 billion and net profit of about $3 billion, the already strong Novo Nordisk could gain more strength if Wegovy is an Alzheimer’s hit. Hence, Novo Nordisk is one of the most exciting neurodegenerative disease stocks to buy.
Annovis Bio (ANVS)
Though small, Annovis Bio (NYSE:ANVS) dreams of treating Parkinson’s disease.
Parkinson’s is a neurodegenerative disease with no known cure, with famous sufferers of Parkinson’s including Mohammed Ali and Michael J. Fox. Current Parkinson’s drugs are not “disease-modifying”, they only treat symptoms and cannot change underlying causes. But Annovis’s drug Buntanetap may be able to modify Parkinson’s disease, removing the neurotoxic proteins that cause it.
Annovis’ phase 3 trial ending this December, makes for a quick turnaround for a risk-taking biotech investor.
The need for new Parkinson’s drugs was underlined recently when drug giant Abbvie’s (NYSE:ABBV) Parkinson’s drug was refused approval. However, if Annovis’ drug can remove the toxic proteins where other drugs failed, approval would seem likely and serve as good news for Parkinson’s disease patients.
But Annovis itself desperately needs Buntanetap to get approval in order to go to market. In Q1 2023 ANVS had only $17 million in cash and cash equivalents. With a $9.7 million quarterly net loss, the runway is limited.
Remember, high risk could also mean high reward. A truly disease-modifying drug could skyrocket the small company overnight, making it one of the best biotech stocks to consider.
On the date of publication, John Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
