When President Ronald Reagan was diagnosed with Alzheimer's disease in 1994, it shed much-needed attention on an illness that afflicts millions of people around the world every year. While there is no cure for Alzheimer's, treatment for it is usually broken down along the lines of whether the patient suffers mild-to-moderate symptoms or moderate-to-severe symptoms.

Japanese pharmaceutical company Eisai (OTC BB: ESALY) currently manufactures the No. 1-selling treatment in the mild-to-moderate category but has submitted an application to the FDA to have its drug Aricept approved for severe symptoms as well. Today, Forest Labs' (NYSE:FRX) Namenda is the only FDA-approved treatment for moderate to severe symptoms. Its application to apply it in the mild to moderate segment was shot down by the FDA earlier this year.

The market for Alzheimer's treatment is huge, accounting for $3 billion in worldwide sales last year, and it's expected to grow to $5 billion by 2009. Aricept accounted for 40% of the market value, with more than $1.2 billion in sales in 2004, and nearly half of Eisai's $2.5 billion in annual revenues.

Alzheimer's disease is the leading cause of dementia, and it is estimated that 4.5 million people in the U.S. alone suffer from it, with more than 90% of them being older than 60. It is estimated that 37 million people worldwide will suffer some form of dementia by 2025. It manifests itself not only as the loss of cognitive functions, such as forgetfulness, but also as the onset of emotional ones, including anxiety and depression.

While the disease attacks the brain in many ways, researchers believe it causes a drop in the production of the chemical messenger acetylcholine, considered to be critical to memory, thought, and judgment. Aricept, which Eisai markets with pharmaceutical giant and Motley Fool Inside Value pick Pfizer (NYSE:PFE), improves the effectiveness of acetylcholine by increasing the amount of it in the brain or improving nerve cell response to it. Other such cholinesterase inhibitors include Johnson & Johnson's (NYSE:JNJ) Reminyl (now called Razadyne to avoid confusion with diabetes drug Amaryl) and Exelon from Novartis (NYSE:NVS). Forest Labs' Namenda treats the disease by regulating the activity of glutamate, another chemical messenger important learning and memory.

Part of the criticism of these Alzheimer's treatments, whether they are for early or late-stage symptoms, is that they are expensive, while they only delay the progression of the degenerative disease. Yet those who take the medications, as well as family members who care for them, seem to appreciate the apparent if relatively temporary restoration of faculties facilitated by the treatment.

Eisai is expected to maintain its dominance in the mild-to-moderate category should it receive approval for severe symptoms, as well. The Japanese pharmaceutical company will prove a formidable competitor to Forest Labs. Aricept's once-a-day formulation, doctor familiarity, and minimal side effects could allow it to steal huge swaths of market share.

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Fool contributor Rich Duprey owns shares of Eisai and does not own any of the other stocks mentioned in this article. The Motley Fool has a disclosure policy.