Our Drug Works! But There's a Catch ...

Rather than investing in AFFiRiS and its placebo-turned-drug, investors should look at large companies such as Eli Lilly, Merck, and Biogen Idec for Alzheimer's disease drugs.

Jun 16, 2014 at 5:58PM

AFFiRiS' press release read like a monumental scientific discovery:

Breakthrough in Alzheimer's disease: AFFiRiS halted clinical progression in Alzheimer patients upon treatment with AD04 in a phase II clinical study

There's just one catch: AD04 was actually the placebo for the clinical trial.

It's not your typical sugar pill, though. The company was testing an Alzheimer's disease vaccine, which contained a peptide that the patient was supposed to make antibodies against and an adjuvant to increase the immune response. The placebo control contained only the adjuvant, which seemed like a reasonable control, since AFFiRiS believed it was the antibodies to the specific peptide that would help the patient.

Instead, the adjuvant alone performed better than the peptide plus the adjuvant. GlaxoSmithKline (NYSE:GSK) has shown that an adjuvant can stimulate the immune system to clear plaques in mouse models for Alzheimer's disease, so the finding has some scientific justification.

While the findings may be real, there's no explanation for why the peptide would decrease the effect of the adjuvant. AFFiRiS obviously has to test AD04 in a well-controlled trial with a true placebo.

As senior biotech specialist Brian Orelli and health-care analyst David Williamson discuss in the following video, investors should be careful investing in companies developing Alzheimer's disease drugs, since we don't really know the underlying cause of the disease. If you really want to invest in Alzheimer's disease drugs, the guys suggest you consider investing in Eli Lilly (NYSE:LLY), Merck (NYSE:MRK), or Biogen Idec (NASDAQ:BIIB), which all have Alzheimer's disease drugs but are large enough that they won't drop much if their Alzheimer's drugs fail. Of course, that means you'll want to own Eli Lilly, Merck, or Biogen Idec for their other drugs and just have the Alzheimer's drugs to offer upside potential.

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Brian Orelli and The Motley Fool have no position in any stocks mentioned. David Williamson owns shares of Merck. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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.

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