Despite some amazing advances medicine has made in the past 30 years, the lack of progress has been equally amazing on some fronts. Alzheimer's disease is one of those areas where we haven't seen much progress. That may be about to change though, not because of a new biotechnology, but because of a twist on a very old idea. Investors should take note.

Investopedia Markets: Explore the best one-stop source for financial news, quotes and insights.

The Barrier, in More Ways Than One
The cause of Alzheimer's isn't a misunderstood one - it's a buildup of toxic abeta 42 proteins in the brain. The challenge has been in getting drugs to the brain to do the repair work. For years, the barrier between the brain and its blood flow - simply referred to as the blood/brain barrier - hasn't allowed medicine to be delivered to brain cells. This is because drug molecules are bigger than the tiny permeable passages in that barrier.

That changed earlier this year, however, and a handful of public companies are charging ahead with the idea of this so-called "small molecule technology." (For related reading, see Investing In The Healthcare Sector.)

A Lot of Promising Candidates
With the help of Astex Pharmaceuticals (Nasdaq:ASTX), AstraZeneca (NYSE:AZN) is working on AZD-3839 - a drug that blocks the enzyme that may ultimately induce Alzheimer's. AstraZeneca owns the drug; Astex Pharmaceuticals is supplying the technology that allows AstraZeneca to develop it. It's called "Pyramid," and it's not only being used by AstraZeneca to develop this drug, but by several other companies looking to develop other small molecule therapies ... now that they can.

Pink sheet company Intellect Neurosciences (OTCBB:ILNS) has also developed a small molecule drug-development platform (molecule), which other companies are using to develop their own Alzheimer's drugs. Pfizer (NYSE:PFE), for instance, is in Phase III testing of Intellect's ANTISENILIN as a treatment for Alzheimer's.

However, Intellect Neurosciences is also developing a couple of its own Alzheimer's treatments using CONJUMAB-A. They're simply being called RV01 and RV02 for now ('Recall-Vax'). Though both are pre-clinical, the fact that they're both small molecule founded make them worth watching.

Elan Corporation (NYSE:ELN) is working on a drug along those same lines - ELND-005 - a small molecule beta-amyloid anti-aggregation therapy (against abeta 42, specifically), that is expected to act as a treatment for Alzheimer's by preventing the buildup of a toxic protein in the brain.

The common element? Big bucks are being shelled out by some big names to develop small molecules. The Elan development speaks most favorably of the premise, in that the company's Phase II results didn't meet the targeted endpoints, yet the company is moving ahead with its development anyway.

The Bottom Line
The final chapter in the Alzheimer's race is far from written. In fact, the Alzheimer's-treatment story may be back to the beginning again. The technology this time around, however, seems to hold more promise than many other Alzheimer's treatment ideas and approved drugs have of late. Indeed, some consider current therapies ineffective to the point of uselessness.

For the company, or companies, that can get their small molecule platforms to deliver drugs as hoped, a $3 billion Alzheimer's market awaits them. That number, however, assumes the current treatment market is its full size. Remember though, most of the currently- available drugs are ineffective, and therefore, unmarketable. If a truly effective treatment option became available, some experts believe that the Alzheimer's drug market could swell to as much as $20 billion. (For related reading, see Evaluating Pharmaceutical Companies.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing, James Brumley did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Stock Analysis

    Starbucks: Profiting One Cup at a Time (SBUX)

    Starbucks is everywhere. But is it a worthwhile business? Ask the shareholders who've made it one of the world's most successful companies.
  2. Stock Analysis

    How Medtronic Makes Money (MDT)

    Here's the story of an American medical device firm that covers almost every segment in medicine and recently moved to Ireland to pay less in taxes.
  3. Investing News

    Latest Labor Numbers: Good News for the Market?

    Some economic numbers are indicating that the labor market is outperforming the stock market. Should investors be bullish?
  4. Investing News

    Stocks with Big Dividend Yields: 'It's a Trap!'

    Should you seek high yielding-dividend stocks in the current investment environment?
  5. Investing News

    Should You Be Betting with Buffett Right Now?

    Following Warren Buffett's stock picks has historically been a good strategy. Is considering his biggest holdings in 2016 a good idea?
  6. Products and Investments

    Cash vs. Stocks: How to Decide Which is Best

    Is it better to keep your money in cash or is a down market a good time to buy stocks at a lower cost?
  7. Investing News

    Who Does Cheap Oil Benefit? See This Stock (DG)

    Cheap oil won't benefit most companies, but this retailer might buck that trend.
  8. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  9. Stock Analysis

    Performance Review: Emerging Markets Equities in 2015

    Find out why emerging markets struggled in 2015 and why a half-decade long trend of poor returns is proving optimistic growth investors wrong.
  10. Investing News

    Today's Sell-off: Are We in a Margin Liquidation?

    If we're in market liquidation, is it good news or bad news? That party depends on your timeframe.
RELATED FAQS
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center