Slaying the Alzheimer Demon

By Karen Rogers - September 13, 2012 | Tickers: BAX, ELN, PFE, RHHBY | 0 Comments

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This morning a husband woke up and couldn’t recognize his wife’s face.  An elderly mother stares blankly at her daughter, vainly trying to remember her child’s name. 

This is the evil of Alzheimer’s, an insidious disease which robs families and friends of their loved ones while they’re still alive.  According to the Alzheimer Association, it will afflict more than 5.4 million Americans this year and is the 6^th leading cause of death.  More than $200 billion dollars will be spent on research, treatment, and caregiving in 2012.

The disease is caused by beta amyloid proteins which become plaque that clumps and attaches to brain neurons.  The neurons, unable to function or communicate, die, and the hippocampus, which plays a major role in memory storage, shrinks.

Investors quickly discover that deciding which pharmaceutical companies’ Alzheimer research is heading in the right direction is difficult. Failed attempts to treat late-stage Alzheimer patients have frustrated stockholders and drug companies alike and caused several major firms to abandon this strategy.  Pfizer (NYSE: PFE) and Johnson & Johnson announced recently they were abandoning their Phase III testing for the drug bapineuzumab after studies showed the drug had no effect on stopping the disease after the beta amyloid’s had already damaged the brain.  Eli Lilly’s drug solanezumab is the only one left in late-stage development, and the company will release their findings next month.

Research is now re-focusing on disease prevention through vaccines.  Fortunately, Alzheimer’s gives plenty of advanced notice before the onslaught begins: 25 years before symptoms become visible, there’s a marked rise in beta amyloid proteins in the brain and a decrease of them in the spinal fluid; fifteen years before symptoms, Tau, a major protein found in neural structures, breaks down, and the levels increase in the spinal fluid; and 10 years before symptoms, irregular glucose patterns occur in the brain.

Learning from the first round of vaccine development failures, both Elan (NYSE: ELN) and Pfizer have developed an antibody that is currently in the active and recruiting trial stages.  ACC-001 interprets the first 7 amino acids in the beta amyloid chain as a mutant diphtheria toxin carrier.  ACC-001 weakens the protein chain and produces antibodies against the beta amyloids.  In Phase II trials, the vaccine inhibited plaque accumulation in the brain and produced antibodies sufficient enough to be effective but without triggering T-cell formation.

Baxter International (NYSE: BAX) and Spanish company Grifolis have developed Gammagard, a liquid that helps clear the beta amyloid proteins from the brain by suppressing the harmful inflammation, and also neutralizes toxins caused by the plaque.  In a small Phase II trial, Gammagard effectively halted the disease’s progression in the group receiving the maximum dosage; those receiving either a reduced dosage or a placebo showed no improvement.

Roche Holding AG (NASDAQOTH: RHHBY) has also turned its focus to Alzheimer’s prevention and is working with the Alzheimer’s Association to prepare a base study of healthy individuals.  On May 12^th this year, the company announced that its antibody crenezumab will be tested in a five-year trial for people suffering from early stage Alzheimer’s.

At the moment, Baxter, Elan, Pfizer and Roche’s research hold the greatest potential for developing preventive Alzheimer’s drugs.  The chart below is a brief comparative analysis of the financial strength of all four companies.

Of the four stocks, analysts give Elan the highest ranking with a Buy/Outperform/Sector Perform rating based on the potential of Acc-001, and the company’s ROE and net income.  Roche is rated as a Strong Buy/Buy, and both Pfizer and Baxter are rated as Buy/Hold.

Investing in companies conducting Alzheimer’s research can help pharmaceuticals find a cure to stop this disease.  Research is very promising and may soon yield a vaccine, because getting old shouldn’t mean forgetting the faces of the people who love you.

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