Can These 2 Health Care Giants Overcome Big Pharma's Alzheimer's Struggles?

Alzheimer's has been one of the trickiest diseases for big pharma to develop drugs for lately, but Merck and AstraZeneca are pushing into late-stage trials with two high-potential drugs.

Feb 17, 2014 at 2:30PM

Alzheimer's disease is one of the most prolific and costliest afflictions in the U.S. According to the Alzheimer's Association, more than 5 million Americans alone suffer from the ailment, which is expected to cost the U.S. more than $1 trillion by 2050. Despite the size of the problem, top drugmakers have struggled to develop treatments for Alzheimer's as of late.

Big Pharma's Eli Lilly raised eyebrows across the health care sector last year when it cut its development of phase 2 BACE inhibitor LY2886721. Swiss rival Roche also cut developmental of a similar drug, BACE inhibitor RG7129, which was in early-stage trials, and many more Alzheimer's disease therapies have been cut during clinical development over the past decade and a half.

That's not stopping Merck (NYSE:MRK) and AstraZeneca (NYSE:AZN), however, as these two leading big pharma giants are making headway on Alzheimer's treatments via mid- to late-stage studies. But can these two companies succeed where so many others have failed in what could be a huge market for investors?

Merck and AstraZeneca battle against history
Merck has taken center stage in the race to develop the promising BACE inhibitors, a type of drug that combats one of Alzheimer's top causes by blocking a certain enzyme that contributes to generating a specific kind of brain plaque-causing protein. Merck got the jump on its competition last December, when it announced it would proceed with a pair of phase 3 trials for its Alzheimer's-fighting candidate MK-8931.

Considering the trouble Alzheimer's drug research has had in the past, it's wise for investors to keep watch with a cautious eye. However, should Merck beat the odds, this drug could be among the company's biggest pipeline successes. Analysts have pegged MK-8931 as a potential $5 billion-a-year drug if it can hurdle years of Alzheimer's failures across the industry. That's a critically needed piece of potential for Merck's R&D department, which has been hampered by criticism over spending and a lack of successful discoveries in the recent past.

But Merck now has company in its late-stage push. Late last week, AstraZeneca announced alongside its earnings report that it will launch its own BACE inhibitor, AZD3293, into combined phase 2/3 trials of its own. Data will be a long time off -- Merck is ahead of AstraZeneca so far, and AstraZeneca doesn't expect data until 2017 at the earliest -- but for AstraZeneca, the possibility of hitting on blockbuster potential is too good to pass up. Analysts project that AZD3293, if successful, could reach or exceed $1 billion in annual sales.

It's one glimmer of hope in what has been a disappointing run for AstraZeneca so far. The firm's full-year revenue in 2013 fell 6% at a constant currency, and the company said that it expects 2014 sales to fall by single-digit percentages as well. Even by 2017, AstraZeneca only expects revenue roughly in line with 2013's figures. That makes projects such as AZD3293 all the more critical to overcome the likes of the patent cliff's challenges, even with the high failure rate of Alzheimer's candidates lately.

Merck's MK-8931 has claimed leadership in the race so far by overcoming the safety fears that downed Eli Lilly's BACE inhibitor last summer. Lilly's drug failed over fears of liver toxicity, and while the company noted that the class of drugs wasn't to blame for the failure, all eyes will be fixed on safety data from Merck and AstraZeneca's trials down the road, despite their early successes.

Setting sights on the long term
There's still a long way to go before MK-8931 or AZD3293 will see the light of day from regulators, but long-term investors in both Merck and AstraZeneca need to keep a close eye on the progress of these high-potential drugs. Both firms have borne R&D failures and costly patent losses as of late, and the promise of billions of dollars of sales a year from fighting Alzheimer's is too important to ignore -- even if recent history has resulted in disappointment after disappointment from some of Big Pharma's biggest names. If Merck or AstraZeneca come through in the battle against Alzheimer's, patient investors today will be poised to win big down the road.

How Merck and other top dividend stocks can revolutionize your financial future
Big pharma stocks like Merck have emerged as some of the top picks for long-term investors who embrace the financial power of dividends. One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend-paying brethren. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Dan Carroll has no position in any stocks mentioned, and neither does The Motley Fool. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers