5 Promising Stocks Fighting Alzheimers to Watch Now

Let’s take a look at the most promising stocks fighting Alzheimers disease. Alzheimer’s disease is one of the most daunting medical challenges of our time, with millions affected worldwide and no definitive cure in sight. There are few drugs that can fight Alzheimer’s, and they only fight symptoms and may not work until a later stage.

For investors, companies working on treatments for Alzheimer’s offer significant potential, but also significant risk. And in case we forget to mention it later on, such companies face enormous hurdles that even peers in the healthcare space do not face.

This article delves into some of the prominent stocks, both on the ASX and globally, that are spearheading efforts to combat this devastating disease. We’ll explore their operations, financial performance, and what makes them stand out in the race against Alzheimer’s.

 

The Alzheimer’s Crisis: Why It Matters

Alzheimer’s is a progressive neurodegenerative disorder leading to dementia, causing progressive loss of memory and deterioration in cognitive function until ultimately there is a state of total disability. Beyond having catastrophic effects on an individual’s well-being, this disease imposes incredible psychological pressures on families and caregivers, who suffer enormous stress and depression when providing care. Economic impacts are equally significant. Most caregivers struggle to balance full-time jobs with the demands of caring for family members, leading to burnout and a lower quality of life.

The societal impact is equally worrying. Alzheimer’s affects the elderly to a great extent, meaning that the numbers are expected to increase sharply with ageing populations across the world. This shifting demographic trend is likely to put immense strain on health and social care systems. According to the World Health Organisation, about 55 million people globally have Alzheimer’s disease. By 2050, these figures are expected to triple. Not only is it a medical crisis but also a socioeconomic one, with care costs estimated to be around $1 trillion annually, rising in the coming decades. It is of the utmost importance to address this situation not only for public health but also to secure economic stability.

 

The Economic Aspect of Battling Alzheimer’s

The economic burden is quite devastating, with a worldwide loss estimated at over $1 trillion per year. Such losses can be broken down into three main areas: costs incurred through healthcare spending, loss of productivity, and the less overt yet significant economic burden of informal care. Direct healthcare expenditures relate to hospitalisations, drugs, and institutional care, which typically are essential at later stages of the disease. Indirectly, Alzheimer’s causes much loss in productivity as many patients and their carers reduce working hours or, in extreme cases, are forced out of employment.

These factors underpin the dire need for cost-effective treatments and support systems for families. Thus, Alzheimer’s remains a significant area of research for medical science and an investment opportunity for companies engaged in developing treatments. However, it is a challenging path, with high R&D costs, prolonged clinical trials, and regulatory barriers.

 

ASX-Listed Stocks Fighting Alzheimers

Actinogen Medical (ASX: ACW)

Actinogen Medical is focused on the development of Xanamem, a novel therapy targeting Alzheimer’s disease and other neurological disorders.

The company listed in 2007 and bears its name from actinomycetes which are compounds that the company was focused on at a time. It bought Xanamem out of the University of Edinburgh in 2014. Xanamem is a once-daily oral therapy that works as an inhibitor of a particular enzyme perceived to be important in neurology.

The drug fights by controlling the level of stress hormone cortisol inside brain cells. High levels of cortisol have been associated with cognitive impairment in Alzheimer’s, depression and many other diseases.

The trouble with Actinogen is there have been plenty of ups and downs along the way including a failed Phase 2 clinical trial of depression. The company is running a Phase II Alzheimers trial that is due to report next year. Success here could lead to a significant re-rating. Failure could lead to a repeat of 2019 when this company crashed 70% in a day after a trial investors thought had failed. Shares did recover when follow-up data showed patients with a higher dose (20mg vs 10mg) had a higher impact and the company said it would proceed in the clinic with that higher dose.

 

Neuren Pharmaceuticals (ASX: NEU)

Neuren Pharmaceuticals is primarily known for its work on Rett syndrome, its pipeline could extend into Alzheimer’s-related conditions. Its lead drug, trofinetide, focuses on neurodevelopmental disorders but may have implications for broader cognitive dysfunctions.

This one carries less risk than other stocks because it already has high sales with Rett syndrome (US$177m in CY23 and up to US$420m in CY24 in case you were wondering), but it carries a risk that it may not be able to dedicate much of its time and resources do this indication. But there still may be further potential in this one if it can obtain approval in other jurisdictions for Rett syndrome beyond the US.

 

International Giants in the Alzheimer’s Landscape

Biogen (NASDAQ: BIIB)

Biogen has been at the forefront of Alzheimer’s research, with its controversial drug Aduhelm (aducanumab) approved by the FDA in 2021. Even though the reception was mixed, Biogen remains a leading player.

• Operations: Aduhelm targets amyloid plaques in the brain, a feature of Alzheimer’s. The company is also collaborating with Eisai to develop lecanemab, further establishing its position in the Alzheimer’s treatment market.
• Financials: Biogen posted revenue of $10.2 billion in 2023, with Aduhelm contributing a small but growing share. The company’s R&D spending was $2.5 billion, underlining its commitment to neurological disorders.
• Potential: Biogen’s success with Aduhelm and lecanemab could revolutionise Alzheimer’s treatment, though Aduhelm’s high price ($56,000 per year) has raised accessibility concerns.

 

Eli Lilly (NYSE: LLY)

Eli Lilly may not be perceived as a heavyweight in Alzheimer’s research, given its competitor drug to Ozempic. Nonetheless, Ely Lilly’s experimental drug donanemab reporting positive results in clinical trials.

• Operations: Donanemab has a binding affinity for amyloid plaques and significantly slowed the rate of cognitive decline in Phase III trials. It awaits regulatory approval.
• Financials: Eli Lilly’s revenue stood at $34.3 billion in 2023, with a rich pipeline of Alzheimer ’s-related therapies. The company spends over $7 billion annually on R&D.
• Potential: If approved, donanemab will likely become a blockbuster drug that boosts Eli Lilly’s leadership in Alzheimer’s research.

 

Roche (SWX: ROG)

Roche’s commitment to Alzheimer’s research is evident in its development of gantenerumab, another amyloid-targeting therapy.

• Operations: While Phase III trials for gantenerumab yielded mixed results, Roche continues to refine its Alzheimer’s pipeline. The diagnostics arm of the company aids in early detection efforts.
• Financials: Roche posted revenues of $68.3 billion in 2023, with substantial investments in research and development.
• Potential: Roche’s integrated approach with diagnostics and therapeutics positions it as a comprehensive player in Alzheimer’s care.

 

Key Considerations for Investors

Clinical Trial Outcomes

Success for Alzheimer’s drugs relies heavily on results clinical trials. Investors must watch for phases, endpoints, and regulatory feedback. New regulatory changes, such as the FDA’s accelerated approval pathway, have started to change this landscape, bringing drugs into the market that show promise in surrogate endpoints, such as biomarker improvement. Other improvements in the design of trials, such as adaptive trials and real-world evidence, are improving efficiency and reducing costs.

Investors must keep close tabs on the phase, endpoint, and regulatory feedback of each trial. They must be prepared for significant volatility after a trial result is announced, whether it is good or bad.

 

R&D Costs and Timelines

Drug development is highly capital-intensive and time-consuming, especially in Alzheimer’s research, where failure rates are notoriously high. For instance, drugs like Aduhelm at Biogen have incurred massive R&D expenditures, requiring billions of dollars in investment to progress through clinical trials and receive regulatory approval. However, the case of Biogen also shows how strategic partnerships, such as the one with Eisai on lecanemab, can help share financial burdens and accelerate development timelines.

Similarly, Eli Lilly succeeded in donanemab by adopting cutting-edge designs of trials, such as the use of a biomarker-driven endpoint in evaluating efficacy early on. The chances of approval from regulators will improve, and the costs will be minimised with reduced trials. Roche also relies on its diagnostics arm to select better patients for its trials so that there is precise and effective testing.

 

Market Demand and Rivalry

Alzheimer’s drugs are often criticised for their price. For instance, Biogen’s Aduhelm was criticised for its price, which deterred market uptake. Investors should consider whether a company’s pricing strategy is in tune with market realities. The Alzheimer’s market is highly competitive, with hundreds of players vying to get their products approved by the FDA and gain market share. Companies differentiating themselves by targeting tau proteins rather than amyloid plaques, for example, stand apart.

 

Closing Call

In addition, investment in Alzheimer’s is essentially a high-risk but very promising investment. The hurdle rate is very high with massive challenges, but acceleration by the pace of change by way of better technology, such as artificial intelligence driving drug discovery and precision medicine, and policy changes can transform everything. These developments bring hope to millions of patients and open an opportunity for investors willing to steer through this complex but very promising sector.

The battle against Alzheimer’s is still long, but the potential of these companies are a promise for patients and investors seeking investment in transformative healthcare solutions. In the end, investors wanting to invest in these companies need to have a lot of patience and a very, very high risk-appetite.

 

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FAQs

• What is the significance of investing in Alzheimer’s research companies?

  Investing in Alzheimer’s research companies offers the opportunity to support advancements in healthcare while tapping into a high-growth sector.

• Which ASX-listed companies are focusing on Alzheimer’s treatments?

  Some ASX-listed companies, such as Actinogen Medical and Neuren Pharmaceuticals, are actively engaged in research and development targeting Alzheimer’s and other neurological conditions.

• How do clinical trial outcomes impact the stock performance of Alzheimer’s-focused companies?

  Clinical trial outcomes play a critical role in determining the market value of these companies. Positive trial results can boost investor confidence and stock prices, while failures or delays often lead to significant declines.

• What are the financial risks associated with investing in Alzheimer’s research companies?

  Alzheimer’s drug development is expensive and time-intensive, with high failure rates in clinical trials. Companies often face significant R&D costs and regulatory hurdles, which can delay market entry and profitability.

• How do international companies like Biogen and Eli Lilly compare to ASX-listed firms in Alzheimer’s research?

  International companies like Biogen and Eli Lilly have larger financial resources compared to smaller ASX-listed firms. While their scale provides stability, ASX-listed companies may offer higher growth potential due to their innovative approaches and smaller market capitalisations.