Alzheimer's therapies are big news lately. The disease is the leading cause of dementia and memory loss. The Alzheimer's Association estimates that 6.5 million Americans 65 and older are living with Alzheimer's dementia (AD) and by 2050, the number of people 65 and older with AD is projected to reach 12.7 million. It is the seventh-leading cause of death.

There is no cure for the disease, and for nearly 20 years no new Alzheimer's therapy had been approved by the Food and Drug Administration (FDA) -- until last year. That's when aducanumab, developed by Biogen (BIIB -2.26%) and Japanese biopharmaceutical company Eisai, received FDA approval but not without a lot of controversy.

Aducanumab targets beta-amyloid, a protein that causes abnormal clumps in the brains of people with Alzheimer's and are believed to damage cells and lead to dementia. Despite the FDA's approval, the therapy isn't widely prescribed, though, because of mixed studies regarding its effectiveness and safety. Insurance coverage of the therapy has been limited thanks largely to a decision by the Centers for Medicare & Medicaid Services (CMS) to restrict coverage for the therapy.

The approval of the therapy, though, seems to have opened the floodgates for other Alzheimer's treatments, with Biogen's lecanemab and Eli Lilly's (LLY 0.75%) donanemab and AstraZeneca's (AZN -0.35%) saracatinib showing promise as Alzheimer's therapies. All three companies are sound financially and have become more attractive to investors thanks to their Alzheimer's therapies.

Biogen: The early leader in the clubhouse

Biogen's stock is up more than 12% this year, due in large part to lecanemab, which like aducanumab, targets beta-amyloid plaques but appears to be safer and more effective, according to a phase 3 study by Biogen and Eisai.

The study looked at 1,795 subjects with early Alzheimer's. After 18 months, the study showed that lecanemab slowed cognitive decline by 27% compared to a placebo. Biogen should hear whether the drug is approved in the first quarter of 2023 as its Prescription Drug User Fee Act (PDUFA) date has been scheduled for Jan. 6. 

That's a major difference from earlier therapies, and if that was all that Biogen had, the stock would still be pretty risky. However, Biogen has a pipeline that includes 29 programs. Still, Biogen has a lot riding on lecanemab's approval and possibly a decision by CMS to pay for the therapy for Medicaid patients with the disease, as the company's revenue has been declining.

In the second quarter, the company had revenue of $2.6 billion, down 7% year over year, and earnings per share (EPS) of $7.24, up from $2.29 in the same period last year, thanks to cost-cutting measures by the company. The company upgraded its guidance to say it expected full-year revenue between $9.9 billion and $10.1 billion, down from $10.4 billion last year. It also said it projected full-year EPS to fall between $15.25 to $16.75, up from $10.40 last year.

Eli Lilly: Working on its own potential treatment

Eli Lilly's stock is up more than 19% for the year. The company's Alzheimer's drug, donanemab, also works by targeting beta-amyloid plaques. It is in five different clinical trials as a remedy for Alzheimer's; only one of the trials, a phase 2 clinical trial testing the drug's use on patients with early symptoms of Alzheimer's, has been completed. The FDA has agreed to do a Priority Review designation for donanemab with an accelerated approval pathway.

Like Biogen, Lilly's revenue declined in Q2. It reported revenue of $6.5 billion, down 4% year over year, and EPS fell by 31% to $1.05. However, Lilly has a larger stable of drugs and a bigger, more promising pipeline than Biogen.

Besides donanemab, the company just received Fast Track designation from the FDA for Mounjaro (tirzepatide) to treat obese or overweight adults, an indication that has excited investors. The drug has already been approved to be used as a therapy for adults with type-2 diabetes and will be launched early next year.

Lilly said it plans to initiate a rolling submission of a new drug application for Mounjaro as a weight-loss drug, possibly speeding along the process. The company said it expects to finish phase 3 clinical trials by the end of April.

AstraZeneca is also in the running

AstraZeneca's stock is down slightly more than 3% this year. The pharmaceutical company's Alzheimer's drug, saracatinib, works by targeting the toxicity in Amyloid plaques, turning off a crucial protein, the tyrosine kinase Fyn, that is active in AD patients. It was developed initially as a potential cancer drug, but while it appeared safe, it was not considered effective enough as an oncology tool.

In Q2, AstraZeneca's revenue was a reported $10.7 billion, up 31% year over year, driven by increased sales throughout its portfolio and especially from oncology drugs. EPS was $1.72, up 90% over the same period last year. AstraZeneca isn't reliant on saracatinib, obviously, as the rest of its portfolio is performing quite well, and it has 184 projects in its pipeline.

Still, saracatinib is promising because the drug has shown promise to treat idiopathic pulmonary fibrosis (IPF), a condition where the lungs become scarred. It is also being tested for its ability to turn off beta-amyloid protein in the brain, allowing synapses to work properly again. So far, it has only been shown to reverse memory loss in mice with AD.

A marathon, not a sprint

While interest in Alzheimer's therapies has skyrocketed lately, the slow progress toward such therapies shows that investors need to be more concerned with the overall health of companies that have such treatments in their pipeline. Of these three healthcare stocks, Biogen has the most promising AD therapy, but because of its smaller size, presents the most risk to investors, compared to AstraZeneca and Eli Lilly, which can more afford to take their time developing Alzheimer's therapies because their financials are stronger.