The excitement
There has been little rest in the pharmaceutical industry lately, especially when considering the gene therapy market. First, Novartis (NVS) launched the first Chimeric Antigen Receptor Therapy (CAR-T) marketed as Kymriah for the treatment of acute lymphoblastic leukemia (ALL) for patients up to the age of 25. Then in August, Gilead (GILD) bought Kite Pharma, a biotech company specializing in the development of CAR-T, for $11.9 billion in cash. Two months later, Gilead secured approval for and launched Kite Pharma’s lead candidate Yescarta for the treatment of certain types of aggressive non-Hodgkin lymphoma.Â
Spark Therapeutics (ONCE) then, in December, secured approval for Luxturna to treat patients with a rare form of retinal dystrophy capable of restoring patients’ vision for those affected. In January 2018, Celgene (CELG) bought Juno Therapeutics, another biotech company with extensive experience developing CAR-T therapies, for $9 billion with hopes to launch JCAR017 to treat relapsed and/or refractory diffuse large B-cell lymphoma (DLBCL).
These are impressive achievements from both a scientific and business perspective and only cover the recent significant milestones within the CAR-T and Gene Therapy markets. As rapid advancements are being made to address some diseases, however, progress in others remains painfully slow.
The halt
On Jan. 6, it was reported that Pfizer (PFE) would effectively be abandoning research to discover new drugs to treat neurological diseases such as Alzheimer’s Disease and Parkinson’s Disease. On Jan. 11, Pfizer released a statement that this decision was “driven by science; not cost.” To many, this made little sense. Why would one of the worlds largest pharmaceutical companies be halting R&D in an area that arguably needs more attention now than ever before?
What many may not know is that pursuing research to treat neurological diseases (specifically Alzheimer's and Parkinson’s) is very risky and expensive. A quick breakdown of some of the most significant Alzheimer's drug candidate failures are listed below:
| Company Stock Ticker | Drug Name | Phase & Date of Failure | Statement & Effect on Company |
| Axovant Sciences (AXON) | Intepirdine | Phase 3 Sep 26th 2017 | No improvement was shown vs. control group. Shares fell 70% |
| Merck (MRK) | Verubecestat | Phase 2/3 Feb 14th 2017 | Stopped due to no positive clinical effect Shares fell 1.5% after hours |
| Eli Lilly (LLY) | Solanezumab | Phase 3 Nov 23rd 2016 | No statistically significant slowing in cognitive decline Shares fell 10.5% |
| Biogen (BIIB) | Aducanumab | Ongoing July 22nd 2015 | Results were “mixed” Shares fell 21% |
| Prana Biotechnology (PRAN) | PBT2 | Phase 2 March 31st 2014 | No significant reduction in levels of beta-amyloid plaques Shares fell 62% |
| Pfizer & J&J (PFE) (JNJ) | Bapineuzumab | Phase 3 August 6th 2012 | Co-primary clinical endpoints not met Shares fell 2.1% and 1.6% after hours for Pfizer and J&J respectively |
Despite billions of dollars spent in R&D within the industry and endless academic publications from top universities, it is still not entirely clear how Alzheimer's begins and manifests despite strong and well-established theories. Many believe that if a drug is capable of stopping the spontaneous accumulation of amyloid protein (generally referred to as the amyloid hypothesis), a patient’s condition will stabilize or improve. This theory is supported by the observation that the higher the amount of amyloid accumulation, the worse the condition of the patient.
While this theory is strong and has a significant amount of supporting evidence, it is still possible this mechanism leading to Alzheimer's is more difficult than previously thought, making it even more challenging to develop drugs for treatment. As a result, companies such as Pfizer are becoming more skeptical of investing in drug development given the number of attempts and failures in addition to competing theories and conflicting scientific evidence.
The Alzheimer's market
Focusing on Alzheimer's specifically, the potential market is enormous, assuming it is possible to develop a treatment that can address it. It has been reported that there are approximately 5 million Americans currently living with Alzheimer's and this could reach 16 million by 2050. Costs associated with Alzheimer's for America was approximated to be $259 billion in 2017 and could reach $1.1 trillion by 2050. The only number that is more sobering than these figures is the failure rate associated with Alzheimer's treatments. It has been reported that between 2002 to 2012, Alzheimer's treatments had a failure rate of 99.6%.
ith a market this large and the absence of effective treatments, a first to market drug would be an enormous achievement and ensure consistent revenues for years to come. Luckily, while Pfizer may be exiting this market, there are still drug candidates advancing clinical trials to treat Alzheimer's. In January 2017, a report was published illustrating where each promising candidate was in development, its mechanism of action and the severity of Alzheimer's being tested in clinical trials. While the figures may have changed slightly since January of last year, the breakdown is exceptionally well organized and provides a very helpful approach to understanding where the market stands and the key players involved in this research. At the time this article was published, there were 28 candidates in Phase 3 clinical trials.
The future
Despite the significant setbacks, there is hope that an effective AD treatment will be approved in the near future.
Arguably, the most promising is a candidate from Biogen (BIIB) known as Aducanumad. Despite previously reported mixed results, Aducanumad is still being investigated and does show significant promise when given to patients with early signs of Alzheimer's and in high concentrations.
A Nature Article published in August 2016 reported that patients who were given Aducanumad on a monthly basis for one year exhibited reduced amyloid plaque formation in addition to showing improved cognition. Aducanumad is still undergoing evaluation in Phase 3 clinical trials with results expected to be released in 2019. If successful, not only would Aducanumad be the first drug to be approved capable of treating Alzheimer's, but would also provide strong evidence supporting the amyloid hypothesis.
Disclosure: I do not have positions in the stocks mentioned.
