Podcast: Developments in the Alzheimer’s Drug Space and Investments Into Healthtech

The Real Deal Podcast

This week’s episode looks at some of the major developments in the Alzheimer’s drug space and how that’s impacting corporate activity. Joining host Julie-Anna Needham is Dane Hamilton, healthcare editor for Acuris. Dealcast is presented by Mergermarket and SS&C Intralinks.

In this episode, you'll learn about:

  • Major developments in the Alzheimer's drug space and how that's impacting corporate activity
  • New drugs that have been developed and tested more recently
  • The corporate landscape in terms of investment and other types of corporate activity


[MUSIC PLAYING] JULIE-ANNA NEEDHAM: Welcome to Dealcast, the weekly M&A podcast presented to you by Mergermarket and SS&C Intralinks. I'm Julie-Anna Needham. In this episode, we're looking at some of the major developments in the Alzheimer's drug space and how that's impacting corporate activity. I'm joined by Dane Hamilton, healthcare editor for Acuris. Hi, Dane.

DANE HAMILTON: Hi, Julie-Anna.

JULIE-ANNA NEEDHAM: Thanks very much for joining me today. So Dane, let's start with an overview. What's the difference between Alzheimer's and dementia more broadly, and how many people are living with Alzheimer's, and how are those figures predicted to increase?

DANE HAMILTON: Dementia is a broad term for general cognitive decline, which often occurs in elderly people. Alzheimer's is a more specific disease with more specific traits that affect around 60 to 80 percent of dementia patients according to the Alzheimer's Association.

The disease affects somewhere around 6 million people in the U.S. alone with something around 35 million worldwide. So it's a big problem, and with the aging population, it's expected to grow. Some estimates put it at maybe around 8 or 9 million by 2030 in the U.S. and 100 million patients by 2050 worldwide. So it's a massive burden to the health care system. Some estimates put it at 600 billion in direct and indirect costs for treatment and care, hospitalizations.

But it's also devastating to the families that care for patients. In advanced cases, the patients may not recognize family members, can't function. Are basically alive, but not really alive. So it's a real crisis.

JULIE-ANNA NEEDHAM: Yeah, and it's one that I have personal experience with because my mother had Alzheimer's, and she died three years ago.

DANE HAMILTON: It's tragic. So naturally, with this huge market, a lot of the big drug companies have spent billions of dollars on clinical trials to develop new treatments for it. And a lot of that money has been flushed away because — because the drugs have basically failed to show any benefit.

JULIE-ANNA NEEDHAM: So can you run through which drugs are currently widely available to treat Alzheimer's, but what are their limitations?

DANE HAMILTON: There really-- there's been a really dearth of effective treatments for Alzheimer's. It's really an extremely difficult disease to get your — to get treated, because it's inside the brain. And nerve cell damage is one of the hardest disease — or hardest disorders to treat. So up until-- so really, basically, billions of dollars has been spent on drug development and billions of dollars has been kind of wasted on failed treatments.

But up until recently, the main drugs are called cholinesterase inhibitors and glutamate regulators. Cholinesterase inhibitors include Aricept and Exelon. And they're pretty good-selling drugs. They — basically, they've been on the market for a number of years. I think Aricept is actually generic — it's made by Pfizer.

So these drugs improve brain function. They improve-- they improve, you know, cognitive function, but they don't really treat the underlying cause of Alzheimer's. So you can take these drugs and it will improve your memory and your motor skills and that sort of thing, but you still face an ongoing decline of brain function as the disease progresses. And despite all this, I mean, the underlying cause of Alzheimer's is still relatively unclear, despite billions of dollars spent by government agencies, the National Institutes of, Health worldwide pharmaceutical companies, nonprofits. It's really been a major, major issue for drug research.

JULIE-ANNA NEEDHAM: And so there have been some new drugs that have been developed and tested more recently. Can you run through what they are, how that science differs to what's been there before, what's been available before, and which are the companies developing them?

DANE HAMILTON: In recent years, in the last decade or so, a lot of the research has been focused on so-called amyloid plaques, which bung up the machinery, the nerve cells in the brain, and are considered a leading cause of Alzheimer's. So-- so basically, a lot of the latest drug research has been focused on mitigating or reducing these proteins, which kind of stick to the nerve cells of the brain. But nonetheless, a lot of drugs have failed in this area and many other areas.

The drugs that have failed basically include major pharma companies like Roche, Eli Lilly, Biogen, and Johnson & Johnson-- have gone through major clinical trials involving thousands of people-- very expensive clinical trials, but they've-- but they've fallen short, shall we say. So it's been a real-- it's been a real, you know, sinkhole of drug development. But nonetheless, it's a huge market.

JULIE-ANNA NEEDHAM: But there has been a major breakthrough this year, hasn't there, with FDA approval of Biogen's drug, which is the first drug that slows the progression of Alzheimer's. Can you tell us a bit more about that and how significant that is?

DANE HAMILTON: OK, well, it's been very, very significant for the development of anti-amyloid plaque drugs, because it is the first drug of its class to be approved, which could have an impact on the progression of the disease, which is rather than just treating the symptoms of the disease like Aricept and other kinds of drugs have in the past.

JULIE-ANNA NEEDHAM: But this has been hugely controversial, hasn't it?

DANE HAMILTON: Yes it has. Biogen has been kind of a long, winding road to this drug. They had canceled-- they had basically canceled the drug in 2019, revived it in 2020, revived it again and sought approval in 2021. The reason they canceled it is because it didn't seem to show enough effectiveness to warrant approval.

But then they went back-- and these are big clinical trials, they involve something like 3,000 people-- then they went back and reviewed the data, and determined that basically, it does have clinical utility and it did show markers of efficacy that would warrant approval. So they sought FDA approval. And it was a very controversial process because the expert panel that the FDA uses for this particular drug pretty much all rejected it and said it doesn't show enough clinical benefit to warrant approval. But nonetheless, the FDA approved it on June 7.

So it was quite controversial. The jury's still out as to how effective this drug is. A number of hospital groups have decided that they're not going to-- they're not going to carry the drug on their formularies. The Veterans Administration, which would be a big buyer of a drug like this, because it affects older people, said they're not going to keep it on their formulary. So it's been quite controversial.

JULIE-ANNA NEEDHAM: And what kind of impact is the approval of this drug from Biogen going to have on the corporate landscape in the space in terms of investment and other types of corporate activity?

DANE HAMILTON: OK, that's a very good question. It really — the approval, however controversial, has led to a real tailwind in investment in the sector. Now there's a lot more focus on earlier stage, biotechs, and major pharmaceutical companies that are working in the Alzheimer's space, because it's kind of like the development of a new computer. Everybody is going to pile on to the next to try to improve on it. And indeed, there are a number of companies, including Roche and Eli Lilly and even Biogen and Eisai have successor drugs, which could be more effective in reducing amyloid plaque, which by the way, is still a theory.

It's not a proven fact that reducing amyloid plaque does stop the progression of Alzheimer's. But nonetheless, it is the best theory so far. It's the most prominent theory. So yeah, the people I talked to, they say it's a real tailwind in terms of investor interest in the sector. So that's been great for the sector.

JULIE-ANNA NEEDHAM: And what about other corporate activity? Will you expect to see any M&A? Are there any companies that might look to list at some point?

DANE HAMILTON: Yeah, definitely. There will be, in addition to more investment in the sector, generally in private and public companies. There will be-- I think there will be a lot more companies looking to tap the public markets and to do M&A. But also, big pharma companies looking to partner with smaller drug developers that are looking to develop new Alzheimer's treatments.

JULIE-ANNA NEEDHAM: And can you give any details of any of those companies, any names of companies, any examples of deals that are already taking place?

DANE HAMILTON: Yeah, certainly. The ones that we're tracking are Acumen Pharmaceuticals, Promius Neurosciences — P-R-O-M-I-U-S Neurosciences — Celgene Pharmaceuticals, Alzion. And these are all companies which are in advanced stages of developing Alzheimer's drugs. And according to Canaccord, there's at least 80 drugs for Alzheimer's or related neurotreatments in various stages of clinical development. So it's a big, big market.

But the Biogen approval, however controversial, has really opened the doors to more investors looking at the sector and more companies like big drug companies looking to partner with smaller biotech companies.

JULIE-ANNA NEEDHAM: That's great. Dane, thanks very much.


JULIE-ANNA NEEDHAM: That was Dane Hamilton, healthcare editor for Acuris. Thank you for listening to this week's episode of Dealcast by Mergermarket and SS&C Intralinks. Please rate, review, and follow the podcast. You can find us on Apple Podcasts, Spotify, or look out for your Mergermarket news alert. For more information, check out our show notes. Join us next week for another episode.