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It’s a no-brainer to invest in businesses that are making headway in the growth markets of the future. In biopharma, therapies to treat or prevent Alzheimer’s disease constitute one such growth market. And with more medicines slated to hit the market relatively soon, now’s the time to be screening for investments if you want to capture some of the upcoming growth.

But which of the players is the best bet? Let’s survey the competitive landscape as it is today, and think through how it’s likely to develop.

Meet the big pharma competitors

Biogen (NASDAQ: BIIB) is the Alzheimer’s market leader, as it has the distinction of having two different medicines on the market. The first is Aduhelm, which it’s effectively abandoning due to the drug’s poor efficacy, burdensome side effects, low uptake by patients, extremely high pricing, and lack of coverage by key public and private insurers. It also sells Leqembi, which nabbed a full regulatory approval in July and hasn’t yet reported a full fiscal quarter of sales data.

Both medicines aim to clear the brain of beta amyloid, a protein that’s associated with Alzheimer’s. The company is seeking to expand Leqembi’s indications to include preclinical Alzheimer’s and moderate Alzheimer’s in a pair of phase 3 trials; it’s also pursuing a pair of earlier-stage programs with physiological targets different from Leqembi’s. But nothing in its portfolio can dramatically or permanently restore cognitive functioning in patients, nor can anything stop further degeneration for more than a few months.

In second place right now is Eli Lilly (NYSE: LLY), which has one program in regulatory review, a pair of programs in phase 3 clinical trials, and a few earlier-stage programs indicated for dementia. Its program in regulatory review, currently called donanemab, appears to be a bit more effective than Leqembi, per its clinical trial data. It uses the same mechanism of action as both of Biogen’s entrants. The drug can slow or halt the disease’s progression for about seven months on average, though the data suggest it has a difficult side effect profile, similar to Aduhelm’s and Leqembi’s. It could still pose a major competitive threat to Biogen, so it’ll be the challenger for the crown over the next couple of years.

Roche (OTC: RHHBY) has four different projects in phase 2 trials and one candidate in phase 1. It expects to try to commercialize at least three by 2026 or afterward. A pair of those programs target beta amyloid, and one targets tangles of tau protein, another disease-relevant molecule. But the clinical results with that approach have been lackluster so far.

At the rear of the pack are Regeneron and Alnylam, which are collaborating on a phase 1 asset with a different mechanism of action from the therapies commercialized and in development by Eli Lilly and Biogen. Rather than trying to remove noxious beta amyloid clumps, their approach is to silence the genes that code for the production of beta amyloid. It’ll take a while before it’s clear whether that tactic works or not.

The competitive landscape is still forming

Investors should recognize that even if the current group of leaders succeed in their ambitions, Alzheimer’s disease will almost certainly still be a long way from being cured. It’s likely that permanently stopping the progression of the disease will still be an elusive milestone for therapies currently in the pipeline.

More distant questions, like the possibility of restoring function in patients with moderate to advanced disease, will take even longer to broach in clinical trials, never mind to address at scale with a commercialized therapy. Expect investment opportunities to be abundant as the next ten years unfold, and don’t feel the need to jump at any single one. This market is in its early days, and winners of these early rounds could well be one-upped by challengers arriving later.

It’s also conceivable that the big pharmas that succeed in capturing a significant market share will have an edge which enables them to consolidate control with their next-gen candidates. As of yet, none can claim any type of competitive advantage in research and development (R&D) in the space. So what’s the play for investors?

At this point, it’s a reasonable strategy to buy shares of multiple competitors in the Alzheimer’s market, so long as those companies aren’t wholly dependent on a victory there. An obvious first choice is Eli Lilly, which has robust growth prospects outside of Alzheimer’s due to its strengthening position in the type 2 diabetes market, and soon enough in the obesity treatments market as well. In contrast, while Biogen has commercialized two different medicines and may be the most experienced developer in the Alzheimer’s market, the total boondoggle of its first drug’s launch makes it hard to be enthusiastic about the stock. Smaller biotechs not mentioned here are risky choices, so don’t put all your eggs in one basket even if they report some good data.

Remember: This is an emerging market. Investing in it today is riskier than it will be in the future, but the returns could well be higher too.

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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alnylam Pharmaceuticals. The Motley Fool recommends Biogen and Roche Ag. The Motley Fool has a disclosure policy.

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