Obama Accelerates Race for Alzheimer's Cure

President Obama introduced his initiative to speed up the pace of research into viable treatments for Alzheimer's disease by pledging a total of $156 million in funding over the next two years. The bulk of the money, $130 million, will go to research for drugs to prevent and treat the disease, while another $26 million will be earmarked for caregiver support and public education about the disorder.

Part of the National Alzheimer's Project Act passed in January of last year, the initiative notes the heavy toll that the disease is taking on an aging U.S. population -- over 5 million Americans are estimated to have the disease, and experts fear that number could triple by 2050. Medical costs associated with Alzheimer's patients' care looms large, with experts calculating these at about $183 billion last year; totals could reach $1 trillion by 2050.

Since Obama envisions this project as a public-private partnership, some lucky pharmaceutical companies stand to benefit from this new initiative. Reasonably, companies with Alzheimer's drugs already in the pipeline or ready for testing stand to reap the greatest rewards. The only problem is that it's a been-there, done-that scenario with Alzheimer's drug research, with much effort and money producing only a handful of mediocre treatments. Unfortunately, spectacular fails seem to be the norm in this arena.

Many misses, no real hits
Time and again, promising research turned into a collection of almost-useless data as drugs that incited hope in the battle against Alzheimer's stumbled in clinical trials. Two of the most disappointing were Eli Lilly's (NYS: LLY) drug semagacestat, which made it through Phase III clinical trials only to find that it actually worsened the condition; and Dimebon, a Pfizer (NYS: PFE) and Medivation (NAS: MDVN) joint venture that eventually was proved ineffective during Phase III. Many lesser drugs have seen their research quietly discontinued, as a list on the Alzheimer's Research Forum clearly shows.

Alas, the four therapies currently on the market do little to control or postpone the disease for long. Three of the drugs, galantamine, rivastigmine, and donepezil are cholinesterase inhibitors, which help accentuate the effectiveness of waning amounts of acetylcholine in Alzheimer's patients' brains. Memantine is a glutamate regulator, since excessive amounts of this chemical can cause brain-cell death.

Meantime, two drugs currently under construction could be on the market by next year, if clinical trials currently finishing up produce the desired results. The drugs, solanezumab, a product of Eli Lilly, and bapineuzumab, made by Pfizer in partnership with Johnson & Johnson and Elan (NYS: ELN) , show much promise and could conceivably be in use by early 2013 by making use of the accelerated approval process promised by Obama's Alzheimer's initiative. Experts feel that the latter drug has the most promise, but either or both could garner their manufacturers a very lucrative payout once they clear all regulatory hurdles. Another drug, Gammagard, is currently in Phase III trials set to end next year. If all goes well, Baxter International (NYS: BAX) , the drug's maker, could see market share by 2015.

This Fool's Take
Although any successful Alzheimer's treatment will raise its parent company's fortunes, the biggest winners here would be Eli Lilly, who owns solanezumab in its entirely, then Pfizer, who owns half of bapineuzumab. Coming in third would be Johnson & Johnson and Elan, each of whom have a one-quarter stake in bapineuzumab, but Elan is a much smaller company so that 25% stake could actually move the biotech's shares the most. None of these drugs promise to cure Alzheimer's, but the hope is that they will be capable of postponing symptoms of moderately-affected individuals for longer than current treatments. But that's a whole lot of patients that could conceivably be helped by these treatments. If all goes well, these companies may well have the next group of blockbuster drugs on their hands.

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At the time thisarticle was published Fool contributorAmanda Alixowns no shares in the companies mentioned above. The Motley Fool owns shares of Johnson & Johnson; buying shares of Johnson & Johnson and Pfizer; and creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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