Is Alzheimer's Research the Next Big Thing in Biotech?

The biotechnology sector is well known for companies chasing the latest hot trend. In the early 2000s it was genome mapping technologies, while more recently we've seen investing dollars streaming into hepatitis-C research. Chasing a hot trend isn't a bad thing as it's usually resulted in improvements in patient care; cheaper genome sequencing and a myriad of non-interferon-based hepatitis-C drug hopefuls are a good example of this in action.

With numerous other popular routes for investment dollars to go next, including RNAi pathway drugs and antibody-drug conjugates, I actually feel that Alzheimer's research represents the next logical area of focus for biotechnology companies.

Research firm Decision Resources predicted last year that the market value of Alzheimer's drugs could nearly triple to $14.3 billion from $5.4 billion by 2020, leaving plenty of room for growth and innovation -- especially for big pharmaceutical companies whose pipelines are lacking organic growth.

The current state of the Alzheimer's drug market is fractured at best. The few FDA-approved drugs currently approved to treat Alzheimer's are either losing ground to generic competition, readying to lose patent exclusivity, or come complete with a laundry list of negative side effects. Eisai's Aricept has found the going tough with generic competition beefing up in the U.S., while Forest Labs' (NYS: FRX) Namenda is slated to lose its patent exclusivity in 2015.

Clinical trial failures have also been commonplace in recent months. A lot of that has to do with the simple fact that the blood-brain barrier is difficult to penetrate with medicine, so developing an effective and safe drug is both time consuming and difficult. There have been a few notable trials recently that ended in FDA defeat, including bapineuzumab, which was developed by Johnson & Johnson (NYS: JNJ) and Pfizer (NYS: PFE) , as well as solanezumab, developed by Eli Lilly (NYS: LLY) .

But promise still remains for the sector as a whole, as is evidenced by yesterday's announcement that investigational scientists are undertaking three international long-term drug studies on the prevention of Alzheimer's by examining three beta amyloid-targeting drugs. Of the 15 drug hopefuls submitted for the study, scientists chose two from Eli Lilly, solanezumab, which attaches to amyloid floating free in the brain before it attaches and becomes plague, and LY2886721, which blocks the beta-secretase enzyme used to make amyloid, as well as one drug from Roche(NASDAQOTH: RHHBY.PK), gantenerumab, that binds to clumps of amyloid and allows it to be removed from the brain.

The studies are slated to start next year and will actually target those who are genetically destined to get the disease, but are showing little to no degenerative decline from Alzheimer's. The goal over a two year period is to determine if one of the three drugs offers a clinical benefit over the other two in preventing Alzheimer's from developing, and if so, to switch all patients to that drug and study its long-term effects.

It appears clear to me that Alzheimer's is the next big money area for biotech and big pharma as patient needs are still largely unmet and prevalence of the disease is on the rise. Keep your eyes on these stocks moving forward as they could wind up being in the center of the next hottest trend in biotech.

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The article Is Alzheimer's Research the Next Big Thing in Biotech? originally appeared on Fool.com.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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