One thing that can help treat any disease is early detection, and Alzheimer’s is no exception. And the good news is that in the near future, detecting cases of Alzheimer’s could involve simply taking a blood test.
A new wave of blood tests includes testing for p-tau217, an abnormal protein that could help accurately detect 90% of Alzheimer’s cases. Current detection rates are much lower than that, with one study finding that primary care physicians correctly detected only 61% of cases. While the Food and Drug Administration (FDA) has not yet approved any of these new tests, they are encouraging developments nonetheless. They could be game changers for two healthcare companies that have approved treatments for Alzheimer’s: Eli Lilly (NYSE: LLY) And Biogenic (NASDAQ: BIIB).
Eli Lilly
Eli Lilly is the world’s largest healthcare company, with a market cap of more than $800 billion. Investors are bullish on the company because of its popular weight-loss and diabetes drugs — Zepbound and Mounjaro. But the company also has a promising early-stage treatment for Alzheimer’s that was recently approved by the FDA: Kisunla.
In clinical trials, it has been shown to slow the progression of Alzheimer’s by 35% over 18 months. Analysts estimate that the drug could potentially generate $5 billion in revenue for the healthcare company at its peak. However, if more patients benefit from earlier detection, it’s possible that the treatment could generate even more revenue. The company also has other trials in the pipeline for other Alzheimer’s treatments, which could position Eli Lilly for even more growth opportunities in this area.
The company’s deep financial pockets could give Eli Lilly plenty of resources to work with, allowing it to focus on a wide range of growth opportunities. In each of the past four years, the company has generated at least $5 billion in profits. For investors looking to own a top healthcare stock that could benefit from advances in early detection of Alzheimer’s, Eli Lilly could be a no-brainer buy.
Biogenic
A cheaper option for healthcare investors is pharmaceutical company Biogen. Technically, it has two approved treatments for Alzheimer’s: Leqembi and Aduhelm. However, the company abandoned the latter because its approval was controversial and Leqembi has shown that it can be a more effective treatment.
The FDA approved Leqembi more than a year ago, after initially approving it through an accelerated approval pathway. A recent study found that the treatment did benefit patients over a three-year period. The downside, however, is that conditions worsen if patients stop taking the treatment, meaning that patients may have to stay on the treatment forever. But Biogen and its development partner, Eisaihave a monthly version of Leqembi that could be approved in January. And they are also working on a weekly injectable version that can be administered at home. Currently, Leqembi must be taken intravenously every two weeks and is usually administered in a hospital or infusion therapy center.
Biogen has a market cap of just $29 billion, and its valuation may be more attractive to value investors. At just 13 times estimated forward earnings, the stock is much cheaper than Eli Lilly, which trades at 57 times forward earnings.
The downside, however, is that Biogen is a riskier investment, with much more at stake in its Alzheimer’s treatment. It has struggled to generate revenue growth, with revenue last year coming in at just $9.8 billion, a 27% decline in just three years. But if there’s a larger patient population that can benefit from Leqembi, Biogen could be an undervalued buy in the long run.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends Biogen. The Motley Fool has a disclosure policy.
A blood test can detect early Alzheimer’s. That could make these 2 stocks red-hot buys. was originally published by The Motley Fool
