Make Money From Alzheimer's Disease Whether Drugs Succeed or Not


A lot of high-profile drugs to treat Alzheimer's disease reported data over the last year. Medivation and Pfizer's (NYSE: PFE) Dimebon last January. Data from the phase 3 program for bapineuzumab, owned by Pfizer, Johnson & Johnson , and Elan , was released in the middle of last year, which was followed by Eli Lilly's solanezumab.

Hundreds of millions of dollars were spent on phase 3 programs in the hopes of bringing in billions in revenue. A drug that can meaningfully slow the disease progression would be an instant blockbuster.

Unfortunately, they all failed. Every. Single. One.

Fixing failure
There are a couple of theories as to why it's so hard to develop a drug to treat Alzheimer's disease:

We don't have the right target. Most drugs have focused on beta amyloid as a target. The protein congregates with itself and forms plaques in the brain. The problem is we don't know if the plaques are the cause of Alzheimer's disease or just a byproduct. Newer drugs are focusing on another protein called Tau, which might help, but only if the next two points aren't an issue.

We're not treating the right patients. It used to be that the only way to diagnose an Alzheimer's patient was postmortem; an autopsy would reveal the plaques in the brain. Cognitive tests while the patient was alive could show the patient's mind was failing, but it's hard to distinguish between Alzheimer's and dementia.

We're treating patients too late to do any good. Another possibility is that the drugs just don't work particularly well once Alzheimer's has progressed beyond a certain point. But diagnosing early Alzheimer's patients is even more difficult. Mild cognitive impairment is hard to detect and isn't necessarily from Alzheimer's disease.

Reducing the noise
The solution for the last two issues has been to develop imaging agents that can detect amyloid plaques. Lilly got its imaging agent Amyvid approved by the Food and Drug Administration last year. Merck selected General Electric's imaging agent, flutemetamol, to test patients before enrolling them in a phase 2/3 study of MK-8931. Bayer was also working on an imaging agent called florbetaben, which it recently sold to India-based Piramal Healthcare.

Excluding the patients that don't have Alzheimer's disease from clinical trials should make the drugs look more effective. If a drug helps 50% of Alzheimer's disease patients, but only 80% of the patients in the study have the disease, the best the drug can show is a 40% effect.

The amyloid detection agents can also be used to detect patients early in the disease progression. Researchers from Brigham and Women's Hospital recently selected solanezumab as the first drug to be tested in a trial of asymptomatic Alzheimer's disease patients. They'll use Amyvid to detect buildup of amyloid plaques before patients show signs of the diseases.

Limited sales, for now
While imaging agents are useful for deciding who should be enrolled in clinical trials, their use in diagnosing patients is fairly limited.

Medicare currently doesn't pay for Amyvid, and a federal advisory panel voted this week that there wasn't sufficient evidence that the imaging agent improves health outcomes of patients with early signs of Alzheimer's disease. Some panelists were worried about false positives, but the bigger problem is that the current treatments for Alzheimer's disease are pretty useless. Having a proper diagnosis isn't particularly useful if there's nothing to treat the patient with.

It follows then, that if a company was able to actually develop a drug that delayed the progression of the disease, Amyvid and the rest of the imaging agents might get more use. In fact, if the drug was approved based on a clinical trial that used the imaging agent, the diagnostic would be noted on the drug label, encouraging doctors to use it before prescribing the drug.

Until then, investors will have to enjoy limited sales to those running clinical trials. At least they'll make money even if the drugs fail.

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