One in every nine seniors is , and the race to cure it is worth big money. While the FDA has approved some Alzheimer’s disease drugs, these can only slow the progression, not halt or reverse it. Despite lacking efficacy, Alzheimer’s disease drugs currently charge because, for sufferers, there is no other choice. Since drugs are expensive and non-curative, the market is crying out for new drugs and ideas. That’s precisely what these companies are offering.
Eli Lilly (NYSE:LLY), NewAmsterdam Pharma (NASDAQ:NAMS), and Cassava Sciences (NASDAQ:SAVA) are all running clinical trials to test drugs that may cure or alleviate Alzheimer’s disease. Their drugs have different targets because scientists still can’t agree on what causes Alzheimer’s. But the FDA is outcomes-oriented, and if any of these drugs can alleviate Alzheimer’s to some extent, they will likely gain approval even if they aren’t perfect.
Betting on clinical trials is risky since the stock can swing wildly depending on the outcome. But if you are confident in the science and the hypothesis, it can pay off big time. All the companies mentioned here will have trials ending in 2023, giving time for a smart investor to get in before the hype.
Drug Stocks to Watch: Eli Lilly (LLY)
Eli Lilly is conducting trials on and , two antibodies that bind to Amyloid β (Aβ). When the antibody binds, the patient’s body destroys the Aβ and halts its effects. Most researchers think that Aβ is the actual cause of Alzheimer’s disease, so this should stop or even reverse the disease’s progress.
This hypothesis is well-worn. The current FDA-approved drugs, and , are also antibodies that target Aβ. Since those drugs were approved, Eli Lilly’s will likely be as well. However, Aducamab and Lecanemab only slow the progression of Alzheimer’s; they do not cure it. They have also with in some patients. These limitations could also hamper Eli Lilly’s drugs, limiting their impact.
If Eli Lilly’s drugs work no better than the current treatments, they may have difficulty getting FDA approval and finding a market. But since they bind to different areas of Aβ, these antibodies could also work much better, with fewer off-target effects. It’s worth noting that Eli Lilly has previously tried and failed with . However, this new clinical trial targets a different population of patients and may prove effective.
The Solanezumab trial will be completed in June 2023, and the Donanemab trials will be conducted in 2024 and 2025. When Solanezumab last reported failure, shares in Eli Lilly . But a successful trial could see shares rise by just as much.
Regardless of the outcome of these trials, Eli Lilly’s showed quarterly revenue of $6.9 billion and expenses of $5.4 billion. They retain a broad base of successful drugs and can continue to seek Alzheimer’s disease cures for a long time yet.
NewAmsterdam Pharma (NAMS)
NewAmsterdam Pharma for Alzheimer’s with surprising targets: . While HDL (high-density lipoproteins) and LDL (low-density lipoproteins) are more well-known in cardiovascular diseases, there is evidence they play a role in Alzheimer’s as well. HDL to LDL ratios are associated with , and Obicetrapib should .
NewAmsterdam Pharma is making a full-court press with Obicetrapib. They’re testing the drug for not only Alzheimer’s disease but also . However, the science backing their Alzheimer’s hypothesis is as sound as the Aβ hypothesis mentioned previously. With Aβ-targeting drugs not providing a cure, perhaps it is time to give other theories a chance.
NewAmsterdam’s showed $139 billion in cash and investment assets and quarterly operating losses of $2.3 billion. They have more than enough room to keep testing their strategy. While NewAmsterdam may seem like a “one-drug pony,” the company’s financials give them time to investigate all avenues of that drug.
It is important to note that NewAmsterdam’s Alzheimer’s disease trial is in Phase 2a. It is not a double-blind study and is not designed to prove Obicetrapib is a cure yet. Instead, it is evaluating whether the drug can be safely given to Alzheimer’s disease patients and in what dose.
But a Phase 2 is still necessary for Phase 3 and FDA approval. The trial will conclude in , with results likely sometime around August 2023. June is also when NewAmsterdam may report results on using Obicetrapib as . NewAmsterdam investors should mark their calendars: this summer will be essential for NAMS stock. This makes NAMS stock a key player among drug stocks to watch.
Drug Stocks to Watch: Cassava Sciences (SAVA)
Cassava is running and for their drug Simufilam, which will end this year. Simufilam aims to fix the protein Filamin A, which has been shown to be patients.
Cassava’s showed $175 million in cash and a quarterly loss of $20 million. They confidently state they have at least 12 months of runway, but that’s very short in the world of clinical trials and the FDA. They need Simufilam to work soon, or they will have to start raising money another way.
Cassava and Simufilam have had controversy in the past. Cassava was hit with alleging fraudulent corporate activities. Meanwhile, the science underpinning Simufilam was called out for . Science published allegations that experimental evidence was faked to support a pro-Simufilam hypothesis.
Furthermore, a citizen petition to halt Simufilam trials was , and while it declined to act on the matter, it is clear these controversies have shaken investors’ faith. Cassava’s stock is down 40% from a year ago and nearly 80% from its highs a year and a half ago.
Cassava has fired back, against the shorts and standing by its hypothesis. The proof will ultimately be in the clinical trials. Prior Phase 2 studies . This Phase 2 trial is not double-blind and will end in December 2023. The Phase 3 trial is a double-blind study and will end in July 2026.
One wonders if Cassava can hold on until 2026, given its financials, but improving the company’s monetary outlook would give them more runway. And success in Phase 2 could make them an attractive purchase for a more prominent biotech.
On the date of publication, John Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
