New Alzheimer’s drugs could be ‘game-changers’ for investment in biotech, writes Linden Thomson, Portfolio Manager at AXA Investment Managers.
A new wave of Alzheimer’s drugs could be a game-changer not only for sufferers but the biotech sector, providing new hope for patients and many potential opportunities for investors.
As we approach World Alzheimer’s Day on 21 September, investors have an important opportunity to reflect on the positive impact they can make with their savings, following a raft of exciting developments in treating the disease – good news both for patients and for biopharma and healthcare firms.
New milestones in treatment
Alzheimer’s is the seventh most common cause of death globally and there has been little help for sufferers in terms of successful treatments.[1]
A breakthrough came in November 2022 when biotech firms Eisai and Biogen presented positive results from the clinical trial of their Alzheimer’s drug lecanemab. This was the first time any drug had consistently demonstrated success in slowing the disease’s progress. [2]
A further milestone was reached when the US Food & Drug Administration (FDA) granted full approval to lecanemab – sold under the brand name Leqembi – in July 2023, allowing it to go on sale in the US, likely to be its biggest commercial market.
The US Centers for Medicare & Medicaid Services, which provides health insurance coverage for older US citizens, has confirmed it will cover treatment with the drug for eligible patients.[3]
This is good news for many patients, while also presenting a significant sales opportunity and removing much of the uncertainty for investors that surrounded the first news of the drug’s efficacy. One analysis suggests it can expect total sales of as much as $12.9bn between 2023 and 2028.[4]
Global opportunities
Elsewhere, Japan has given the go-ahead in the first step towards formal approval for lecanemab,[5] while Biogen and Eisai have also submitted applications for approval in Europe, China, Canada, and the UK.[6] In Japan and China, the applications have been designated for priority review[7], a process that aims to accelerate the pathway for new drugs deemed to have significant clinical value.
Similarly in the UK, lecanemab has been designated for the Innovative Licensing and Access Pathway, which also aims to reduce the time to market for innovative medicines.[8]
Other key drugs
Lecanemab is not the only new Alzheimer’s drug making headlines – Eli Lilly reported positive results from a Phase 3 clinical trial of its drug donanemab in July. The drug was able to slow cognitive decline by 35%, by tackling amyloid protein – a cause of Alzheimer’s disease – in the brain. Half the patients in the trial were able to stop the treatment after one year, as it had delivered a significant effect.[9]
There are currently 187 trials assessing 141 drugs for the treatment of Alzheimer’s disease,[10] among them early studies by smaller biotech firms like Prothena and Acumen. Lecanemab itself resulted from a research partnership between a small Swedish biotech company, BioArctic, and the much larger Eisai.[11]
A significant impact
These new developments are an important first step in fighting Alzheimer’s. As well as helping patients in the short term, they provide validation that treatments can have efficacy as well as insights into the disease’s process. This could help facilitate a broader discussion among regulators, leading to a potentially more supportive regulatory environment and a new pathway for smaller players to continue innovative early research and development.
This could pave the way for second and third generation drugs which on their own or in combination could offer better outcomes for patients, while also helping reduce the burden on their families, and on healthcare systems. In turn, this creates potential new opportunities for investors.
A new era for patients, and investors
Even for the successful products in the late stage of development, there are still major challenges to overcome – for instance, to ensure broad patient access, the cost of the drugs would likely need to be covered by health insurance programmes like the UK National Health Service. Yet some 60% of the global Alzheimer’s and dementia burden is found in low-and-middle-income countries[12], where access to medicine could be a challenge.
In the UK, there are likely to be challenges to the commercial roll-out due to a lack of required infrastructure, including diagnostic facilities to ensure appropriate diagnosis and treatment as well as essential safety monitoring. Another hurdle is that currently, lecanemab and donanemab need to be administered intravenously at a healthcare facility at regular intervals
Nonetheless, the development of these drugs is a long-awaited and hugely exciting breakthrough in biotech and healthcare. They provide treatment, and hope, for patients and their families, and the commercial opportunities are likely to be significant.
The market for Alzheimer’s drugs is expected to be sizeable and underpinned by long-term fundamentals including an ageing global population. We believe these new developments in the treatment of this devasting disease signals a new era of patient care, and potentially a new wave of investment opportunities.
References to companies are for illustrative purposes only and should not be viewed as investment recommendations.
2 Could an Alzheimer’s breakthrough herald a major new market for biotech? | AXA IM Core (axa-im.com)
3 Explainer: Who is eligible for the new FDA-approved Alzheimer’s drug? | Reuters / Statement: Broader Medicare Coverage of Leqembi Available Following FDA Traditional Approval | CMS
4 Alzheimer’s drug Leqembi set to generate $12.9bn in sales by 2028 (pharmaceutical-technology.com)
5 Japanese panel OKs Alzheimer’s drug by Eisai and Biogen – Nikkei Asia.
6 Health Canada Accepts New Drug Submission for Lecanemab as Treatment for Early Alzheimer’s Disease | Biogen / EISAI SUBMITS MARKETING AUTHORIZATION APPLICATION FOR LECANEMAB AS TREATMENT FOR EARLY ALZHEIMER’S DISEASE IN EUROPE | Biogen / EISAI SUBMITS MARKETING AUTHORIZATION APPLICATION FOR LECANEMABLECANEMAB AS TREATMENT FOR EARLY ALZHEIMER’S DISEASE IN GREAT BRITAIN | News Release：2023 | Eisai Co., Ltd./ BIOLOGICS LICENSE APPLICATION FOR LECANEMABLECANEMAB DESIGNATED FOR PRIORITY REVIEW BY CHINA NATIONAL MEDICAL PRODUCTS ADMINISTRATION (prnewswire.com)
7 LECANEMABLECANEMAB RECEIVES PRIORITY REVIEW STATUS IN JAPAN (prnewswire.com)/ BIOLOGICS LICENSE APPLICATION FOR LECANEMABLECANEMAB DESIGNATED FOR PRIORITY REVIEW BY CHINA NATIONAL MEDICAL PRODUCTS ADMINISTRATION (prnewswire.com)
8 Drug donanemab seen as turning point in dementia fight – BBC News
9 https://alz-journals.onlinelibrary.wiley.com/doi/10.1002/trc2.12385
10 BioArctic announces research collaboration with Eisai regarding BAN2401 – BioArctic
11 Biogen’s Alzheimer’s treatment: How do drug approvals work? | World Economic Forum (weforum.org)
12 Biogen’s Alzheimer’s treatment: How do drug approvals work? | World Economic Forum (weforum.org)
