Alzheimer’s disease: no easy answers

investment viewpoints

Alzheimer’s disease: no easy answers

Meret Gaugler - Co-Portfolio Manager

Meret Gaugler

Co-Portfolio Manager

The Golden Age fund taps into the trend of an ageing population. This involves investing in companies which aim to help today’s retirees lead longer, more fulfilling and financially independent lives. Many of the companies that fit the ageing population trend come from the healthcare sector.

Investors frequently have questions regarding medical afflictions commonly associated with ageing, such as Alzheimer’s Disease. Enquiries usually centre on what companies in the portfolio hold the most promise on advancing medical progress in this field. Unfortunately, the answer is not straightforward.

Age is the main risk factor for Alzheimer’s, and the number of cases is increasing fast as societies are ageing. A curve that depicts the projected number of Alzheimer’s patients takes on the shape of a hockey stick. That means there is a point at which the curve bends sharply upwards and the rise in patient numbers accelerates. This inflection point is not that far away1

Alzheimer’s disease is not only a terrible ordeal for patients and their families. It is also a very expensive disease. Patients need care around-the-clock. Drugs used to treat the disease cost billions every year, even though current treatments fail to have a profound or a lasting effect. There are then the associated personal costs, affecting people who are forced to quit their own job because they cannot find a suitable institution to care for a parent with Alzheimer’s.

The potential to make a sustainable healthcare investment

The way we look at sustainable investments in the healthcare sector has to change, if we are going to adapt to an ageing population. We pride ourselves on having recognized this early on. Alzheimer’s is not the only disease linked to old age. Cardiovascular disease, cancer, diabetes are others, to name just a few.

These are all chronic diseases which means they may require treatment for many years on end. A growing number of older people means an increase in the associated costs. As this becomes more apparent, governments and insurance companies have taken a closer look at what treatments they are willing or in fact able to pay for. The days when a pharmaceutical company could launch an old drug in a new guise and at a higher price are over. Treatments do not only have to show they treat a disease better, but also that they offer value for money. Value is ideally a reduction in the total cost burden.

Finding a treatment for Alzheimer’s Disease that could prevent, slow down or even just delay the onset of the disease offers a huge opportunity to save costs. Such a drug could likely be sold at an attractive price, more than recouping the necessary development spend.

 

The complexity of Alzheimer’s

Alzheimer’s is a complex disease. Similar to cancer, it is the result of “multiple injuries”. Those injuries are rarely the same in two patients, even if they ultimately present with similar symptoms.

In fact, Alzheimer’s can only seldom be diagnosed with finality during a patient’s lifetime. In recent years, science has made progress when it comes to finding common traits among Alzheimer’s patients.

Certain proteins that cluster in and around brain cells seem to be impairing their proper function and could be contributing to their death. Most pharmaceutical development in Alzheimer’s today is focusing on one or another of these proteins. It is not yet certain what is the main cause of Alzheimer’s, or whether there are many contributing factors, but this seems like a reasonable place to start.

 

Statistics are the stumbling block

The road to finding a drug for Alzheimer’s remains littered with failures. We believe the main stumbling block is to do with variability.

It is very rare that a treatment has one single effect on the human body. Side effects are not the exception, but the rule. That means that while they can do good, they can also do harm.

Government agencies take a very close look at every new treatment and only approve those able to demonstrate their clinical efficacy outweighs their risks. Of course, the higher the unmet clinical need, the lower the agency’s bar tends to be. The worse the disease, the higher the risk the regulator is willing to take. But the agency cannot cast aside its own rules. Even for a problem as overwhelming and pressing as Alzheimer’s, drugs need to go through thorough clinical testing and demonstrate that the data coming out of such a trial are not random. 

If all the patients who test a new drug designed to reduce low blood sugar end up having similar and lower levels of blood sugar, while all patients serving as controls end up at a similar but higher level, you will likely conclude that the drug works. If both treated and control patients end up having blood sugar levels that are all over the place, the picture is much less straightforward. Scattered data points is what is meant by high variability.

In the case of Alzheimer’s, there are two main sources of variability that are quite unique to the disease. The first source is the nature of the disease itself. Symptoms of Alzheimer’s only become apparent once a very large percentage of the brain cells key for memory storage have disappeared. The reason for this is that the human brain is extraordinarily good at compensating for lost function. However, while some days two remaining cells could be doing the job of five, on other days, they might only be doing their own. This means memories come and go and there can be sudden ‘flashes’ of memories even at late stages of the disease.

The second source of variability is the fact that memory is more difficult to test than blood sugar, for example. The tools used are questionnaires and careful observation of a patient in his or her daily routine. Both of these are imprecise at best.

In the end, a clinical trial with high variability is simply less likely to show satisfactory results, making it a higher risk investigation. 

 

What we do invest in?

Despite the risky nature of drug research in Alzheimer’s disease, pharmaceutical companies have not given up. And neither have we. We do invest in pharmaceutical Alzheimer’s programs. But not only do we have to find the science promising, we also want the high risk reflected in low investor expectations. And we look at potential solutions that go beyond drug research, such as early detection diagnostics or even avenues to prevent Alzheimer’s. For example, where substantial quantities of lifestyle data might help us find out more about potential risk factors, in order to screen out “multiple injuries” that lead down the road to Alzheimer’s disease.

 

Sources

1 Changing the trajectory of Alzheimer’s Disease: a National Imperative, alz.org, 2010

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