Alzheimer's disease is a terrible illness which affects an estimated 5.4 million Americans today. Alzheimer's is also the 6th leading cause of death nationally. Unfortunately, there are currently only two types of FDA-approved drugs (memantine and cholinesterase inhibitors), which solely function to slow down the effects of the disease.

Luckily, pharmaceutical companies remain hard at work in their attempts to combat this debilitating illness. Two candidates making noteworthy strides in this indication are Biogen (NASDAQ:BIIB) and Acadia Pharmaceuticals (NASDAQ:ACAD). The $20 billion Alzheimer's disease treatment market should have investors wanting to grab a slice of the pie -- but which company is the better buy? Read on to find out.

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Biogen

Biogen made headlines in early 2015 when its early stage trial of Alzheimer's disease drug aducanumab produced positive results for both the 3mg and 10mg dosing. While the 3mg dose did not show as much efficacy as the 10mg dose, the 10mg dose led to dangerous brain swelling in some patients. Investors hoped that a 6mg "goldie locks" dosage would show the merits of both increased efficacy and decreased brain swelling. Unfortunately, these hopes were dashed later on that year when the 6mg dosing trial failed to show a dosage-dependent clinical efficacy profile. However, upon further analysis of the data, Biogen showed that the treatment did have a dose-dependent slowing of cognitive decline for mild and prodromal (early stage) patients. On this news, the company pushed forward with its phase 3 study for aducanumab which hopes to enroll 1,350 patients for a 5-year study.

Aducanumab is an amyloid-targeting monoclonal antibody. Aducanumab functions by targeting what are called "amyloid plaques" which build up in the brain of Alzheimer's patients. Unfortunately, the underlying cause of (and involvement of amyloid plaques in) Alzheimer's disease is still the subject of much debate. This controversy became more apparent when Eli Lilly decided to abandon its anti-amyloid product solanezumab after it failed to show benefit in patients with mild Alzheimer's disease. Since solanezumab attacks the same target as aducanumab, the failure of solanezumab threw cold water on Biogen. The company is still optimistic about aducanumab's chances, though, for a number of reasons. Topline data from Biogen's phase 3 studies of aducanumab don't read out until 2018, so until then investors will have to be patient.

Acadia Pharmaceuticals

Acadia received approval for its Parkinson's disease psychosis (PDP) drug, Nuplazid, in April of last year. Since its launch, sales of the drug have been growing like a weed -- totaling $5.4 million in the third quarter of 2016. While the Parkinson's disease indication is huge (an estimated 1 million individuals in the U.S. suffer from Parkinson's and 40% suffer from PDP), an even larger market could come in the form of Alzheimer's disease psychosis (ADP). According to Acadia's internal data, an estimated 25% to 50% of Alzheimer's patients could develop ADP -- making this a potentially massive indication.

Dreams of a treatment came closer to reality late last year when the company released positive phase 2 data of Nuplazid in ADP patients. While estimates vary, Leerink believes that the expansion into ADP could double or triple potential sales estimates. Currently, with only the approved PDP indication, sales are forecast at around $1 billion by 2022.

While Nuplazid does have blockbuster potential, it also has a checkered past. Nuplazid initially failed to meet its primary endpoint of a decrease in antipsychotic activity due to a high placebo response back in 2009. In addition, although approved in PDP, the drug contains a black box warning stating, "Elderly patients with dementia-related psychosis treated with antipsychotic drugs are at an increased risk of death." And lastly, while Nuplazid did show a statistically significant reduction in psychosis versus placebo in its phase 2 study in ADP, the result was barely significant with a p-value of .0451. (Researchers typically look for p-values under .05.) Overall,Nuplazid's entry into the larger ADP market will require a successful phase 3 study.

The better buy?

To say that Alzheimer's disease has been a tough disease to fight would be an understatement. In fact, over 99% of drugs in the past decade have failed to demonstrate efficacy against this disease. However, it is good to know that pharmaceutical companies continue to give it all they've got. In Biogen's case, the company recently released good data from a long-term phase 1b study demonstrating the durable effects of aducanumab. However, the fact that aducanumab relies on a very similar mechanism of action as solanezumab calls into question whether Biogen is simply throwing good money after bad. Regardless, an approval for aducanumab would be transformative even for this large-cap company.

In Acadia's case, while the company does have great potential, it is important to remember that this biotech only has 1 approved drug and has had no experience bringing a product to market prior to the launch of Nuplazid. Overall, however, I believe the combination of a large total addressable market combined with expanding indications makes Acadia a better buy for the risk-tolerant investor looking to get exposure to this potentially huge market.

David Liang has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Biogen. The Motley Fool has a disclosure policy.