The hope for a cure for Alzheimer's disease recently received a major boost from the National Institutes of Health, or NIH. Approximately $45 million in new funding is expected to support clinical research trials and translational research. The clinical trails are looking at ways to stop the disease's progression and the translational research is focusing on "identifying, characterizing, and validating novel therapeutic targets." NIH Director Francis Collins commented on the National Institute on Aging website that the agency is determined to advance the understanding of Alzheimer's biology and quickly find effective therapies.
Roche and Lilly's DIAN-TU trial
One of the trials to benefit from the funding is the Dominantly Inherited Alzheimer's Network Trials Unit, or DIAN-TU, trial. The trial is supported by Roche (NASDAQOTH:RHHBY), Eli Lilly (NYSE:LLY), and Cogstate. Cogstate is an Australian company that provides cognitive testing for clinical trials, sports medicine, and academia. Cogstate tests can detect cognitive decline in individuals who are otherwise healthy; the tests have been used in clinical drug trials for more than 10 years.
The DIAN-TU trial is expected to receive $1.5 million in fiscal 2013 and possibly $6 million over four years. According to the NIA, this trial is testing three new drug treatments (gantenerumab, solanezumab, and a third, unnamed drug) in volunteers who have an inherited form of Alzheimer's disease. Though early onset Alzheimer's is rare, the research conducted is expected to provide information relevant to both early and late-onset forms of the disease. The study is testing new anti-amyloid beta drug treatments, which treat the interference in brain cell communication that occurs when amyloid plaques build up in the brain. This is considered the hallmark of Alzheimer's disease.
While not participating in this trial, Merck (NYSE:MRK) is undergoing its own Alzheimer's research with a current phase 2 trial involving MK-8931, an enzyme found to reduce the toxic proteins associated with the disease. While the trial is only in phase 2, the research performed involves testing the therapy's effectiveness in treating the disease, along with its safety and possible side effects. In Merck's second-quarter earnings call, Roger Perlmutter, president of Merck Research Labs, confirmed that the study continues to enroll patients ahead of a safety review to be completed by the end of 2013. The company posted a drop of 11% in worldwide sales, but growth was noted in key areas, such as vaccines, diabetes, and immunology. Merck expects full-year 2013 sales to drop 5% to 6% compared to last year.
Roche's strong results in first half driven by cancer therapies
Roche's treatments for Alzheimer's disease are still in the early stages of development, and the additional funding from NIH should help to further research in this area. Neuroscience therapies made up 2% of sales in 2012. However, about a year ago the company doubled the size of a study testing the drug gantenerumab, which treats patients that have yet to show signs of dementia. Study results are expected in 2015, and, if results are positive, Roche may be able to file for marketing approval of the drug based on a single trial.
During the first half of 2013, Roche's group sales rose 5%, mostly due to its cancer treatments and its clinical lab diagnostic products. Pharmaceutical sales rose 6%, and the diagnostics division recorded a sales increase of 3%. The company's spending in R&D rose 4%, due to trials for its oncology and neuroscience segments, which include programs for Alzheimer's disease. Roche's core EPS rose 12% and net income on an IFRS basis rose 41%.
Eli Lilly had inconclusive results in Alzheimer's research
While Roche expanded its research, Reuters reported in September 2012 that Eli Lilly's trial for antibody drug solanezumab had promising but inconclusive results. Industry analysts suggested that the drug could be an option for mild sufferers of Alzheimer's or those in the early stages of the disease. Further research, which could take about three years, would be needed to determine if this option is viable.
The company's first half of 2013 saw total revenue rise 3% over 2012. Excluding certain charges and income from the transfer of drug exenatide's commercial rights, net income was $2.5 billion and EPS was $2.30. The company anticipates 2013 revenue between $22.6 billion and $23.4 billion. Despite the U.S. patent expiration of its popular depression/anxiety drug Cymbalta in the fourth quarter of 2013, Lilly expects its remaining drug portfolio to drive revenue growth. Gross margin as a percentage of revenue was estimated at 79%.
My Foolish conclusion
Alzheimer's disease is expected to have major social, health, and economic consequences in the 21st century. According to Cogstate, incidence of dementia is increasing worldwide, and by 2055, 682 million people may be affected by it. Of interest to investors is the increase in NIH research funding in this area, which shows the sense of urgency in finding viable treatments that stop the disease in its tracks. If the trials conducted by Eli Lilly and Roche provide positive results, these companies could see a shift in their drug portfolio and the therapies that contribute most to their bottom line.
Eileen Rojas has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.