Degenerative central nervous system, or CNS, disorders such as Alzheimer's and Parkinson's diseases are notoriously difficult to treat, and they represent vastly unmet medical needs. Central nervous system disorders can affect a person's memory, ability to learn, communicate and even carry out daily activities. Unfortunately, current therapies focus solely on alleviating symptoms, and even then, these treatments tend to be only moderately effective at doing so.

Nonetheless, Alzheimer's drugs still raked in more than $4 billion in sales in 2012, despite their glaring inadequacies in terms of long-term effectiveness. Because of the strong market opportunity for CNS disorders and the general need for new therapies, drugmakers are racing to develop the next generation of CNS drugs, with a whopping 102 clinical candidates currently under development for Alzheimer's disease alone.

With that said, here is a look at 3 CNS drugmakers that have been having banner years.

Acadia (NASDAQ:ACAD) has been the darling of the biotech world since announcing successful top-line results from its late-stage trial for pimavanserin, a treatment for Parkinson's disease psychosis, or PDP. The late-stage trial showed that pimavanserin met its primary endpoint of antipsychotic efficacy, and a key secondary endpoint for motoric tolerability. Based on these results, Acadia has decided to file a New Drug Application, or NDA with the FDA for pimavanserin late next year.

At present, shares of Acadia are up more than 300% this year, pushing the company's market cap close to $2 billion. My take is that this run up is a bit overdone, and you might want to wait for a pullback before jumping into Acadia. The drug's possible approval is still well over a year away, and Acadia is essentially funding its operations through public sales of stock.

Prana Biotechnology (NASDAQ:PRAN) shares have been marching upward ever since initiating a mid-stage trial for its Alzheimer's drug PBT2 earlier this year. Specifically, shares are now up 115% this year, and volume has been increasing at a steady clip as well. The mid-stage trial for PBT2 is called the IMAGINE trial, which is testing the effect of PBT2 on amyloid deposition in the brains of patients with prodromal or mild Alzheimer's disease. A total of 40 patients are expected to be enrolled, with results to be announced in March.

Patients who complete the IMAGINE trial can subsequently enroll in an open-label Extension study, expected to last an additional 12 months. So far, 24 out of a possible 29 patients have elected to enroll in the open-label portion of the study.

What's the big deal? Firstly, the scientific community has taken note of PBT2, naming it a Top 10 Global Neuroscience Project. But what investors are excited about is PBT2's value proposition.

Prana has a tiny market cap that is only now inching its way toward $200 million, and if PBT2 were to receive approval, the drug could easily see sales in the billions due to the sheer lack of effective Alzheimer's treatments.

Foolish investors should exercise caution with this compelling story, however. While positive mid-stage results will definitely be a boost to the share price, negative results would likely drop shares back to their pre-run up levels. My take is that there could be plenty of upside remaining in Prana after announcing positive mid-stage results, so the risk of jumping in early outweighs the potential reward.

Sangamo (NASDAQ:SGMO) is developing a gene therapy for the treatment of Alzheimer's disease called CERE-110. The idea is to deliver a nerve growth factor to the brain of Alzheimer's patients in hopes of stabilizing brain metabolic activity.

Sangamo recently completed an early stage trial of CERE-110, where data from PET-scans measuring glucose use suggested this approach may slow cellular deterioration in the brain. These data were presented at a Sixth Clinical Trials on Alzheimer's Disease (CTAD) Meeting last week, and Sangamo shares jumped almost 6% as a result. Sangamo is thus proceeding with a mid-stage trial to be funded by a grant from the National Institute on Aging, which is part of the National Institutes of Health.

While these early results are definitely encouraging, you should temper your expectations in terms of CERE-110 as a value driver. CERE-110 is still in the early throes of development, and a lot can still go wrong as a result. And personally, I'm rather wary of biotechs with $500-million-plus market caps and no late-stage clinical candidates, such as Sangamo. Such scenarios are hard to view as value buys, and come with too much risk for my taste.

George Budwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.