Blog: You, us, everyone

Investment theme: Healthcare and related – Can dementia be cured by 2025?

The ever increasing elderly generation poses a number of significant new challenges to society, including a) social and economic imbalances between the younger and older generations (today’s elderly people have more cash available to cover their day-to-day requirements than the younger generation), b) there will soon be more people in retirement age than those working, c) different views on how and where to life, and d) the fact that political and economic decisions are usually made with a short-term focus to cover immediate requirements, when sometimes long-term considerations should prevail.

Healthcare companies seized the opportunities presented by these shifting lifestyles a long time ago. Indeed, longevity offers a number of excellent secular growth trends, with the prominent ones being the treatment of cardiovascular diseases, strokes, cancer, and dementia. While important scientific progress has been made in developing treatments for cardiovascular diseases, strokes and cancer, there have recently been a number of setbacks in the research on Alzheimer’s Disease. In fact, there is still no effective treatment available in the market. Why?

Well for a start, it is now a known fact that the initial stage of dementia actually occurs about 14 to 16 years before the illness reaches its full extent. This makes R&D extremely difficult to progress. For example, phase one of the illness may last up to 7 years and consist only of short-term memory weakness. This symptom, which everybody has from time to time, does not automatically lead to dementia at a later stage.

According to a report issued by the WHO, the number of people with dementia is expected to jump from its current rate of 33 million people to 66 million in 2030 and to more than 110 million people in 2050. Over the same time span, direct patient care costs are predicted to increase from about USD 214 billion today to USD 1.2 trillion.

At present, many of the big pharmaceutical players are in a dead-lock situation with their dementia developments. Their hypothesis that avoiding brain cell death, which causes the occurrence of plaques and tangles, would result in positive results has not been decisively proven. Nevertheless, they continue to allocate R&D budget towards finding dementia solutions. Yet with limited results! Smaller and more specialist companies, most of which are start-up like operations, seemed to have made more rapid progress in recent times. Their R&D focus is on phase one of the illness, with a key focus on analyzing big-data. Among the benefits of following this path are the following:

• It is strongly encouraged by the US Food and Drug Administration (FDA) which is expected to apply lower market hurdles for products that deal with early-phase symptoms,
• The treatment of early signs of decline in cognitive function may lead to the full rehabilitation of brain function, which is not the case for any of the available medicines that deal with phase 2 and 3 cases.

Given the possible size of the market in the years ahead, it might be opportune to focus on investment candidates that are either in a well-advanced situation (mostly smaller companies) or on bigger companies that have expressed a strong commitment to pursuing dementia treatments. Latest developments suggest that bigger pharmaceuticals are likely to in-source the most promising drug candidates; an approach that would be  likely to be chosen by a company with existing market exposure, but at an impasse with its own R&D.

Links to:

• Companies with a research focus on BACE
• Companies with a research focus on Gamma-secretase
• Companies with a research focus on Tau tangles
• Companies with a research focus on nicotine and insulin based treatments
• Historic providers
• Companies with a research focus on next generation type of developments
• Companies involved in joint ventures