Johnson & Johnson (NYSE:JNJ) recently signed a deal with Evotec (NASDAQOTH:EVTCY), a German development-stage biopharmaceutical company, going back to the drawing board in its ongoing quest to treat Alzheimer's disease.
Treating Alzheimer's disease has been one of the most elusive goals in the health-care industry. Previous attempts by Johnson & Johnson, Pfizer (NYSE:PFE), Elan, and Eli Lilly (NYSE:LLY) have woefully failed, and the root cause of the disease is still frequently debated.
Current treatments address only the symptoms
To understand why Johnson & Johnson has gone back to the drawing board, we need to better understand the fragmented state of Alzheimer's treatments today.
Currently approved Alzheimer's treatments, such as Aricept and Namenda, generally try to keep brain cells from deteriorating.
Aricept, which was originally developed by Eisai and Pfizer, prevents the breakdown of a chemical messenger required for learning and memory. Namenda, originally developed by Eli Lilly but now manufactured by Forest Laboratories, tries to protect brain and nerve cells from excess calcium, which can cause neurological degeneration.
Other treatments function similarly -- they address the symptoms of Alzheimer's but do not treat the underlying cause of the disease.
The prevailing belief among researchers is that brain plaques, which form like rust on metal, cause Alzheimer's disease. Many previously tested treatments have focused on clearing out these plaques, also known as beta-amyloid protein fragments.
Learning from past failures
Unfortunately, none of these plaque-clearing treatments has come close to a market approval yet.
Bapineuzumab, a plaque-clearing humanized monoclonal antibody developed by J&J, Elan, and Pfizer, was once considered the lead candidate, but it was later found to be ineffective in treating patients with mild to moderate Alzheimer's disease. Trials for the intravenous version of the drug were discontinued last August, and the subcutaneous version was eventually abandoned in July.
Eli Lilly's experimental Alzheimer's drug, solanezumab, was another hopeful contender in plaque-clearing treatments, but it failed to meet the primary endpoints of its phase 3 trials in advanced Alzheimer's cases last August. Yet rather than abandon the drug, Lilly initiated a larger phase 3 trial to test the drug on mild Alzheimer's cases instead.
Lilly's other experimental Alzheimer's treatment, known as a BACE inhibitor, attempted to prevent the formation of brain plaques rather than clear them out. Unfortunately, it failed a phase 2 trial after patients developed liver problems.
Yet that failure hasn't discouraged other companies, such as Merck (NYSE:MRK) and AstraZeneca, from continuing the development of similar BACE inhibitors. In July, Merck reported positive phase 2 results for its treatment in mild to moderate Alzheimer's cases, but expectations are still low for the drug because of Lilly's failure.
These issues have prompted serious debates in regard to the role of brain plaques in Alzheimer's disease, and whether drug companies are too focused on a wrong approach.
In February, the FDA offered draft guidance to assist companies in the development of new Alzheimer's diseases but emphasized the importance of focusing on developing early-stage treatments first.
Johnson & Johnson and Evotec's new partnership
Therefore, it makes sense for Johnson & Johnson to think outside the beta-amyloid box and pursue new methods of developing Alzheimer's treatments.
In June, the company opened the Johnson & Johnson California Innovation Center, which is intended to pursue forward-thinking ideas in medicine. The California Innovation Center is the department that signed the aforementioned deal with Evotec.
Evotec has done a lot of research into the connection between molecular and cellular changes within the brain and Alzheimer's disease. The company believes that its database of information, known as TargetAD, could potentially be used to develop treatments for Alzheimer's disease at its earliest stages.
Johnson & Johnson will pay Evotec up to $10 million to cover R&D costs and up to $145 million in milestone payments for each drug that gains market approval. Evotec will also receive royalties on future sales of marketed products.
For Johnson & Johnson, which generated $67.2 billion in revenue last year, the Evotec deal represents a tiny investment. Yet for Evotec -- a much smaller company with a market cap of $750 million -- this is another big vote of confidence for its research, which has already attracted major players such as AstraZeneca, Bayer, Teva, and Roche.
Roche is also developing an Alzheimer's treatment with Evotec, which is currently in phase 2b trials. Results from the Roche and Evotec collaboration are expected by early 2015.
The Foolish takeaway
After all the failures of the past, it will probably take a medical giant like Johnson & Johnson or Roche to finally achieve the goal of treating the root causes of Alzheimer's disease.
Some smaller companies, such as Eli Lilly, simply aren't financially fit enough to pursue goals as elusive as Alzheimer's disease. Lilly, which faces the daunting patent expiration of its blockbuster antidepressant Cymbalta, spent so much time and money on Alzheimer's treatments that it now has no viable replacement for its top drug.
The CDC estimates that the number of Alzheimer's cases in the United States could nearly triple by 2050, because of an aging population and the current lack of effective treatments. Hopefully, new partnerships such as the one between Johnson & Johnson and Evotec will keep that bleak forecast from becoming a reality.
Fool contributor Leo Sun has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.