Is an Alzheimer’s Drug a Good Investment?

The Alzheimer’s drug, aducanumab, has been given a new lease on life after a phase III trial was previously halted. Unlike other treatments for Alzheimer’s disease, aducanumab has the potential to halt the progression of the disease instead of just treating symptoms. The drug was discovered by Neurimmune and is licensed by Biogen Inc.  The medical significance if this drug passes all trials and becomes available for treatment is great. But, is an Alzheimer’s drug a good investment?


Aducanumab is a human monoclonal antibody. Unlike antibodies that the body produces to fight infections, aducanumab targets beta-amyloid which is the material that is found in the brains of patients with Alzheimer’s disease. The plaques are toxic to nerve cells in the brain. The rationale for aducanumab is that it can stop the buildup of beta-amyloid and therefore the progression of Alzheimer’s. The drug had progressed to a stage III FDA trial. This means that it had been demonstrated not to cause any bad side effects and that it helped in animal studies. In stage III the goal is to prove that it has a statistically significant effect on the progression of Alzheimer’s disease.

Likely FDA Aducanumab Approval

Stage III testing of this drug was halted in March of 2019 when it was believed that it would not meet expectations and fail testing. However, re-evaluation of the study results showed that it might work after all. Thus phase III trials have been resumed. So far studies show that patients taking a high dose of this drug have a 23% reduction in their rate of decline from Alzheimer’s disease. Now the FDA has indicated that the drug is safe and effective which will clear the way for its FDA approval as a treatment for Alzheimer’s.

Is an Alzheimers Drug a Good Investment - Brain in Alzheimers

Current Alzheimer’s Drug Treatments

The Mayo Clinic website lists four drugs currently available to manage symptoms of Alzheimer’s. Three cholinesterase inhibitors that help symptoms in mild to moderate disease are Donepezil (Aricept), Galantamine (Razadyne) and Rivastigmine (Exelon). These drugs help until the reduction in viable brain tissue reduces the amount of cholinesterase to inhibit. The other drug which is used on more severe stages of the disease is Memantine (Namenda). This drug also helps symptoms but does nothing to slow the progression of or cure the disease.

Increasing Incidence of Alzheimer’s Disease

The number of Americans currently with Alzheimer’s is 5.8 million.

Millions of Americans have Alzheimer’s or other dementias. As the size and proportion of the U.S. population age 65 and older continue to increase, the number of Americans with Alzheimer’s or other dementias will grow. This number will escalate rapidly in coming years, as the population of Americans age 65 and older is projected to grow from 55 million in 2019 to 88 million by 2050.

The current incidence of Alzheimer’s in people aged 65 and older is 10%. As the number of people in the older age group increases so will the number of people suffering from Alzheimer’s.  Treatment of Alzheimer’s will be for the rest of the person’s life and so long as the medication helps. Thus treatment with aducanumab could be for decades. This would be a significant income stream for a company like Biogen.

Is an Alzheimers Drug a Good Investment - Biogen Stock
Biogen Stock


Biogen is an American multinational biotech company that currently trades for $324 a share on NASDAQ.  Its primary focus is treatments for neurological diseases but the company has many other types of drugs. Their current list of drugs includes treatments for multiple sclerosis, chronic lymphocytic leukemia, spinal muscular atrophy, psoriasis, hemophilia A, and hemophilia B. Drugs in development by Biogen include treatments for acute optic neurites, lupus nephritis, idiopathic pulmonary fibrosis, neuropathic pain,  and amyotrophic lateral sclerosis (Lou Gehrig’s Disease) along with aducanumab.

Biogen stock has had a very bumpy ride over the last seven years as investors have alternately loved and hated the stock due to the success or failure of its drugs in clinical trials. While it currently sells for $330 a share the price has been as high as $380 a share in 2015 and as low as $234 a share in 2019. Investors who got in by 2000 saw the stock go from $40 a share to its current price. The stock has a P/E ratio of 10.98, does not pay a dividend, and would see a nice addition to its income stream if aducanumab becomes a mainstay for Alzheimer’s treatment.

However, their Alzheimer’s drug will only be part of their product line, albeit a profitable one for a long, long time.

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