Drug cocktails aren't just for alchemists anymore. In many diseases they've become big business, and investors would be smart to pay attention.
Two heads are better than one
Perhaps the most famous drug cocktail was developed to fight HIV. Doctors figured out that attacking the virus from multiple angles could slow it down enough that patients could live for an extended period of time with the virus.
Taking multiple pills a day is worth it to save your life, but I imagine it's still a pain. Never one to miss an obvious opportunity, drug companies started combining pills. Now, the top-selling HIV drugs at both Gilead Sciences
Recently, the HIV companies have taken it a step further and reached out to their competitors to develop combination drugs. Gilead and Bristol-Myers Squibb
Not all partnerships are happening after drugs are approved, though; earlier this month, Merck and AstraZeneca
If you can't beat 'em ...
A company needs to set up a partnership to make a combination treatment with a patented drug, but it doesn't really have to befriend the competition to take advantage of their already-approved drugs.
Rather than going head-to-head against the competition, many drugmakers are developing add-on treatments. Since the drug only needs to show an incremental effect instead of having to beat the competition, it's easier for the drug to get approved.
Pfizer is taking that approach with testing Sutent for breast cancer. The drug failed to best current treatments in two trials, but Pfizer had a backup plan and is already testing Sutent separately in combination with sanofi-aventis' Taxotere and Roche's Xeloda.
The next-generation hepatitis C drugs from Vertex Pharmaceuticals and Schering-Plough
No drug stands alone
Except in the rare case where a drugmaker is developing a drug for some rare orphan indication, most drugs have some kind of competition. Investors without the stomach for death-match make-or-break clinical trials should look for drugmakers that are combining their treatments. Lowering the bar for success might allow you to enjoy a cocktail after the drug is approved.
Fool contributor Brian Orelli used to do this cool trick where he printed out the Fool's disclosure policy, made it into a funnel, poured in a cocktail and made it disappear. But then he realized it wasn't a good idea to waste alcohol. He doesn't own shares of any company mentioned in this article.