Alzheimer's disease (AD) is the most common type of dementia, a syndrome in which cognitive functions deteriorate, nerve connections in the brain become obsolete, and brain regions begin to shrink. This is beyond the usual consequences of biological aging, which makes it increasingly difficult to do everyday tasks. In other words, Alzheimer’s impacts the brain’s functioning capabilities such as memory, thinking, orientation, learning capacity, and behavior, and may be responsible for 60-70% of dementia cases worldwide. The elderly are at a higher risk of developing this disease.

According to the World Health Organization (WHO), approximately 55 million people worldwide live with dementia, and nearly 10 million new cases are recorded every year, making it one of the leading causes of disability and dependency among the elderly. According to recent data, an estimated 6.5 million Americans aged 65 and older suffer from Alzheimer-induced dementia, with the number expected to rise to 13.8 million by 2060. Back in 2014, the United States drew attention to this condition when the total hit 5 million cases, and by 2021, the number further increased by 27%. This is a significant jump that cannot be ignored.  
 

Exhibit 1: Number and ages of people 65 or older with Alzheimer’s Dementia

Source: Alzheimer’s Association
 

A granular breakdown of publicly available data suggests over 60% of those affected by Alzheimer’s live in low and middle-income countries, and dementia-adjusted life years (DALYs) are roughly 60% higher in women than in men. Women also account for 65% of total dementia deaths. Alzheimer's primarily affects older people, and reports also note that as the percentage of older people rises in almost every country, there will be 78 million cases of the disease in 2030 and 139 million cases in 2050. Furthermore, the estimated cost of Alzheimer's disease and related dementia (ADRD) care in 2021 was $355 billion.

According to one study, Alzheimer's is the only disease among the top ten causes of death in the United States that cannot be prevented, cured, or even slowed. It is also increasingly the leading cause of death from brain disorders as well as a leading cause of physical impairment, both of which necessitate prompt medical attention. However, there is no cure available to treat Alzheimer's disease, even though inhibitors such as Rivastigmine, receptor blockers, antipsychotics, and antidepressants are used to control symptoms and delay the deterioration of the brain.

Although there are currently no cures or treatments to slow down or stop the progression of the disease, there are numerous new treatments being investigated in various stages of clinical trials. According to a study published in May 2022 in the Alzheimer's Association Journals, there were 143 agents in 172 clinical trials aimed at developing treatments to fight Alzheimer’s as of January 25, 2022. Disease-modifying therapies accounted for 83.2% of all agents in trials, while symptomatic cognitive enhancing treatments accounted for 9.8% and drugs for the treatment of neuropsychiatric symptoms accounted for 6.9% of clinical trials.

The high prevalence of the Alzheimer's disease, a growing elderly population, and a strong product pipeline are key drivers of growth in the global Alzheimer's therapeutics market, which was estimated to be worth $4.04 billion in 2021. According to Grand View Research, the market will grow at a compound annual growth rate (CAGR) of 16.2% through 2030. 

Strict regulations imposed by drug approval agencies and the failure of late-stage drugs in clinical trials are impeding the growth of the AD therapeutics industry. However, a few leading pharmaceutical companies are making progress toward developing and commercializing treatments for Alzheimer’s disease.

In June 2021, Aduhelm, developed by Biogen Inc. (BIIB), received FDA’s accelerated approval as the first and only Alzheimer's disease treatment. Biogen is a global biotechnology company that specializes in the discovery, development, and delivery of therapies for the treatment of neurological diseases.

The approval was based on clinical trial data that demonstrated the treatments’ effect on reducing amyloid beta plaques in the brain region, which was and still is believed to be one of the causes of the disease. However, the FDA's approval caused controversy about whether the drug is effective. Some critics claimed that the regulator had an "inappropriately close relationship" with the pharmaceutical company. As a result of the controversy, major medical institutions and medical doctors refused to prescribe the drug to patients. Experts and medical professionals were concerned about the quality of the data used in making the FDA's decision. Even though aducanumab, sold under the brand name Aduhelm, helps reduce the build-up of amyloid protein plaques in the brain, researchers are still skeptical that it will result in any major changes in patients’ ability to independently engage in daily activities. Biogen and Eisai Co. Ltd., a Japanese pharmaceutical company conducted two similar studies on patients with mild cognitive impairment, with one trial demonstrating no benefit of aducanumab and the other trial demonstrating notable benefits.

The third stage of the study was halted in 2019 after it was determined that the mechanism was insufficient in helping patients. However, several months later, the companies reported that the mechanism’s effectiveness could be proven with hard data. Given the complexities of the two existing studies, FDA officials opted for accelerated approval, however, they made the decision without consulting with their advisory committee. Based on these developments, Medicare refused to fund the drug with other insurers.

Eisai and Biogen have also been working together to develop and commercialize Lecanemab. Data from the third stage of the Lecanemab clinical trials showed efficacy on the verge of 27%, with a minimum threshold of passage of 25%. Lecanemab showed fewer side effects and may have a possibility of achieving a greater clinical effect. The drug may be approved, allowing patients to receive appropriate therapy.

In the case of Aduhelm, Biogen has received more rights to the drug, which is now decommissioned but still legal, and Eisai has received more rights to Lecanemab, which is thought to be more promising. Thus, the partnership was 70 to 30 in favor of Eisai, which was reflected in the company's share price, which increased by more than 40% after this decision.

Roche Holding AG (RHHBY) is a Swiss multinational healthcare company that is also working on the commercialization of Alzheimer's disease treatment. Roche, in partnership with MorphoSys, is working on the development and potential commercialization of gantenerumab, a monoclonal antibody for the treatment of Alzheimer's. MorphoSys AG (MOR) is a German commercial-stage biopharmaceutical company that specializes in the discovery, development, and delivery of innovative cancer drugs, and has established itself as a leader in the field of therapeutic antibodies. In November, Roche announced that gantenerumab had failed to slow the rate of cognitive and functional decline of Alzheimer’s patients in phase 3 clinical trials. According to data published by the company, the rate at which beta-amyloids were removed was lower than expected. Gantenerumab is the most valuable research and development project in the pharmaceutical industry globally, according to Statista, with a net present value (NPV) of more than $12 billion.

The drug was withdrawn from registration following the disappointing results, and shares of Roche fell in the aftermath. However, the company’s long-term outlook is positive. The intelligence firm Evaluate predicts that global pharmaceutical industry revenues will reach $1.6 trillion by 2028, with Roche continuing to be among the top pharmaceutical companies in the world. According to the report, Roche's sales will reach $62.7 billion in 2028, accounting for 3.9% of the global market, driven by its oncology and diagnostics segments coupled with its continuous R&D investments in developing a treatment to fight Alzheimer’s disease.

Donanemab from Eli Lilly & Co. (LLY) is another candidate on the market that has received the FDA's breakthrough therapy designation for the treatment of Alzheimer's disease. Donanemab has an estimated NPV of $5 billion. Donanemab is an investigational antibody that targets a modified form of beta-amyloid known as N3pG. The company reported positive results in the first active comparative study in early symptomatic Alzheimer's disease in November. Donanemab reduced brain amyloid plaque levels compared to the baseline by 65.2% at 6 months in the Phase 3 TRAILBLAZER-ALZ 4 study, compared to only 17% for Aduhelm.

Exhibit 2: Selected top pharmaceutical R&D projects in the Alzheimer’s treatment market based on net present value (NPV) as of August 2022 

Source: Statista
 

Prothena Corporation (PRTA) is another late-stage clinical company with expertise in protein dysregulation and has a robust pipeline of investigational therapeutics aimed at the development of treatments for Alzheimer's disease. The company has a portfolio of AD treatments based on first-generation treatments. PRX012, a next-generation anti-amyloid beta antibody under investigation for the treatment of Alzheimer's disease, received FDA Fast Track Designation in April. PRX012 is currently being studied in Phase 1 clinical trials, and preclinical data has shown promising results.

Vaccines for Alzheimer's disease are also being developed by early-stage biotech companies. Vaxxinity, Inc. (VAXX), for example, is a company developing such vaccines. Vaxxinity is a young biotech company developing safe and effective immunotherapeutic vaccines for chronic diseases. The first phase of research on its UB-311 vaccine, an anti-amyloid beta immunotherapeutic vaccine, has been completed and has been granted Fast Track designation by the FDA. The company is now looking for a partner to conduct the second phase of the research.

Empirical evidence suggests that developing an effective treatment to mitigate the health risks associated with a highly prevalent condition such as Alzheimer’s Disease will pave the way for biotech companies to enjoy lucrative financial returns in the long run. For this reason, investing in the top companies that are making steady progress toward developing a treatment for Alzheimer’s could help investors enjoy handsome investment returns in the future as well.