Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation.

Executive summary: Ageing populations mean Alzheimer’s disease and other forms of dementia will unfortunately become more prevalent. The disease already kills more people in the US than breast cancer and prostate cancer combined. By 2050, the number of people with early onset Alzheimer’s is forecast to double versus current levels. The social and economic cost will be significant, potentially exceeding $1tr globally over the next decade. While there is no current cure for Alzheimer’s, the good news is that extensive research is being focused on finding treatments for both slowing the disease and treating its symptoms. Major players such as Biogen, Eli Lilly, Novo Nordisk, Pfizer and Roche are conducting promising trials. Even with a significant drug treatment market opportunity ahead (worth at least $14bn by 2030), progress will unlikely be linear and predicting winners at this stage difficult.

“Imagine a bookshelf falling over, with your most recent memories being the books at the top. These go first, with the oldest memories, or lowest books, last. And that’s just the beginning of it.” This was how the onset of Alzheimer’s Disease was once memorably described to your author by a leading expert in the field. Alzheimer’s represents a rapidly growing public health concern causing significant detrimental consequences to the affected people and their families. It also has a substantial and increasing global socioeconomic impact.

Your author has been lucky that no one in his immediate family has been affected by Alzheimer’s, although many readers of this piece will be unfortunately familiar with the devastating consequences it can have. However, demographics mean that we will all, be more likely to encounter people affected by Alzheimer’s going forward. That is, unless drugs are developed to counter the effects of Alzheimer’s and even prevent or pre-empt its onset. Although still early days and with many hurdles to overcome, developments are encouraging.

People worldwide are living longer. Most people globally can expect to live into their sixties and beyond. In developed nations, these figures will clearly be higher. Every country in the world is experiencing growth in both the size and proportion of older persons in the population, per the World Health Organisation. By 2030, 1 in 6 people in the world will be aged 60 years and over. By 2050, the share of the population falling into this category will have doubled relative to 2020 levels.

With ageing comes deterioration. Molecular and cellular damage inevitably accumulates over time. This leads to a gradual decrease in physical and mental capacity as well as a growing risk of disease, and ultimately death. Managing the ageing process (particularly at a state level) is complicated by the fact that changes are neither linear nor constant.

One of the most common consequences of ageing is dementia. The term is often used interchangeably with Alzheimer’s but the two have different meanings. Dementia is not a specific disease. It is an umbrella term that describes a wide range of symptoms that could include memory decline, decreased focus and attention, worsening judgement and reasoning skills as well as broader behavioural issues.

There are many types (and causes) of dementia, with Alzheimer’s being the most common one. First identified by Alois Alzheimer, a German psychiatrist, in 1901, it is behind more than 60% of cases of dementia. Specifically, it is a neurodegenerative disease that usually starts slowly and progressively worsens. Other forms of dementia may include vascular, frontotemporal, Lewy body and more.

What causes Alzheimer’s (and other forms of dementia too) is still poorly understood. Factors that may be responsible include genetics, head injuries, clinical depression, high blood pressure and other adverse lifestyle choices. The most common early symptom is difficulty in remembering recent events – hence the bookcase analogy. As the disease advances, symptoms can include problems with language, disorientation and mood swings. The world becomes a more confusing and frightening place as the person struggles to understand what is going on around them. Your author witnessed some of these impacts when he worked as a volunteer for the Alzheimer’s Society (a leading UK charity) as a student and visited several care homes during his time with them. With Alzheimer’s, bodily functions are gradually lost, ultimately leading to death.

The speed of progression can vary, but patients who are affected by Alzheimer’s can typically expect to live between 2-20 years from onset. The typical life expectancy following diagnosis is 3-9 years. Worldwide, 70-100m people are estimated to have early Alzheimer’s disease, a figure which could double by 2050, per the World Health Organisation. Alzheimer’s is already the fifth leading cause of death among Americans 65 and older, per the Alzheimer’s Association (a leading American charity). It kills more people in the US than breast cancer and prostate cancer combined.

The cost to the economy is also meaningful. In 2023, Alzheimer’s and other dementia will have cost the US an estimated (by the Alzheimer’s Association) $345bn, a 15% increase relative to 2022 levels. This relates to lost productivity and the cost of treatment. Add in the estimated 18bn hours of care provided by unpaid caregivers in the US and the cost rises to almost $700bn. By 2030, total costs in the US could exceed $1tr.

At present, there is no cure for Alzheimer’s disease or any other type of dementia. Optimists assert that research will beat dementia. The good news is that around 150 drugs are in trials for Alzheimer’s disease (per the Alzheimer’s Society). Over 100 of these aim to slow the progression of the disease, while the remainder seek to treat symptoms. Advances in AI should also lead to an acceleration in the rate of drug discovery. As we have discussed elsewhere, by 2030, over 30% of innovative pharmaceuticals could be created by generative AI. Unlike a human researcher, AI can work 24 hours a day.  

There are currently only two drugs that have been approved by the FDA to treat Alzheimer’s.  Both have been developed and manufactured jointly by Biogen and Eisai. Aducanumab (sold under the brand name Aduhelm) was approved in June 2021, albeit in a controversial decision that led to three advisers to the FDA resigning, based on concerns that there was an absence of evidence over the drug’s efficacy. It is still available in the US but has been superseded by Lecanemab (sold under brand name Leqembi). Following clinical trials that showed that the drug slowed the speed at which memory and thinking skills deteriorated by 27% relative to its placebo, Leqembi was approved by the FDA in July 2023. When taken over an 18-month period, its manufacturers assert that the drug may slow the progression of Alzheimer’s by about seven months.

As with all drugs, there have been reported side effects associated with taking Leqembi. These include bleeding, headache and nausea. Japan is the only other country where Leqembi has been approved to-date, although the European Medicines Agency is expected to reach a decision before the summer.  Biogen and Eisai are currently working on a new subcutaneous version of Leqembi (currently it is available only intravenously). This is expected to become available by late 2024 or in 2025, which could help drive greater uptake.

Much of the recent work being undertaken on Alzheimer’s drugs relates to treatments involving GLP-1 molecules. As demonstrated by both Novo Nordisk and Eli Lilly, GLP-1 (glucagon-like peptide) has proven highly effective in managing the impacts of diabetes and obesity as well as in potentially suppressing addictive behaviours beyond hunger, such as smoking and alcohol. Real world evidence trials in Denmark cited by Novo show a reduced risk of dementia or Alzheimer’s with GLP-1 by up to 60%. Randomised controlled trials by the company also point to less decline in cerebral glucose metabolism, lower risk of dementia diagnosis and a short-term memory improvement. Similarly, pre-clinical studies involving semaglutide (an anti-diabetic medication) point to improved memory function and reduced neuroinflammation.

Against this background, Alzheimer’s is “high on the agenda” for Novo. This comment was made by the Chief Executive of the business at its March Capital Markets Day. He highlighted how the company had initiated two phase 3 trials (evoke and evoke+) in 2021. Each involves 1840 patients with the idea being to confirm the superiority of an oral semaglutide solution versus a placebo on the change in cognition and function in people with early Alzheimer’s disease. Expected completion is in 2025. Eli Lilly started a similar trial with 1800 patients (involving a drug called donanemab) in 2022. While it achieved primary completion last year, full completion is not expected until August 2025. Separately, Lilly is in the midst of phase two efficacy trials (with a drug called remternetug) to help manage early onset dementia.  

Research and drug development is also continuing apace in other areas relating to Alzheimer’s. At one end of the spectrum, work is being conducted around blood-based diagnostics. These could measure some of the key proteins associated with Alzheimer’s that would be critical to enabling earlier treatment. Companies such as Quanterix and Roche are active in this field. The other major area of focus is on drugs for treating symptoms of Alzheimer’s. The aim here is for medications not to stop the damage Alzheimer’s causes to brain cells, but rather to help lessen or stabilise symptoms, at least for a limited period of time.

Several cholinesterase inhibitors (such as Donepezil, branded as Aricept) are currently approved by the FDA for the treatment of Alzheimer’s symptoms in the US. These drugs support communication between nerve cells. Another angle is in the development of glutamate inhibitors (memantine, branded as namenda is a good example), which are prescribed to improve memory, attention, reasoning and language. Some companies are also working on treatments for agitation, or clinical restlessness. This is considered a significant unmet need, with 70–80% of Alzheimer’s patients affected. Axsome Therapeutics’ AXS-05 drug has already reported positive phase two and three results.

Given the growth in people likely to experience Alzheimer’s Disease, the market size for drug treatment is significant. It was already worth $2.2bn at the end of 2020, per GlobalData, a leading data and analytics company. By 2030, the market could be worth ~$14bn across the world’s eight largest economies, equivalent to a compound annual growth rate of 20%. Other research providers incorporate different scopes (such as including therapeutics, for example) into their projections, but consensus opinion seems to settle on an overall market opportunity that could be between $10bn and $20bn over the next decade.

Such growth prospects ought to be attractive to businesses developing novel drug treatments as well as other ancillary services such as palliative care. However, many experts in the field believe that in order for Alzheimer’s treatments to be effective, a range of key barriers need to be overcome. Given existing hurdles, current patient journeys in treating the disease tend to be complex. Obstacles might include the fact that early symptoms are dismissed as normal ageing. There are also limited screening tools and diagnostics tools available at present.

There is also the broader issue of market preparation. Three issues (at least) need to be considered. First, governments will likely need to support healthcare system preparedness. With large numbers of patients with Alzheimer’s Disease set to enter the system, this may lead to significant bottlenecks and corresponding delays to patient care. Next, it will be important to increase the rate of diagnosis, through better education, screening tools and techniques. Finally, there remains a burden of evidence generation, particularly in terms of understanding the impact of treating the disease at different stages of its progression.

It is also important to remember that new medicines will come at a cost, particularly given the size of the anticipated treatment populations. A year’s treatment of Aduhelm or Leqembi would likely cost $25,000-30,000 at present. Both the US government (via the Medicare scheme) and certain employers are preparing based on several published working papers. For Alzheimer’s drugs, the US Centers for Medicare & Medicaid Services (CMS) has said that it will be tracking patients in a registry to assess the real-world benefits of the treatments. Similar approaches are being reviewed elsewhere in the world.

In most scenarios, uptake of new drugs is likely to be gradual. Clinicians, nurses, caregivers, and patients will all likely need time to become acquainted with new medications. These may require infusions as well as intermittent MRIs in the first few months of treatment to assess for serious side effects. At the same time, while current drug development will likely delay disease progression by two to three years, remember that there is no cure for Alzheimer’s at present. Optimists, of course, assert that if drugs can slow the rate at which Alzheimer’s develops, then patients could remain in their homes for longer before transitioning to long-term care centres. Any delay of disease progression would also help to return a portion of the 18bn hours lost in the US to caregivers.

With very few drugs currently approved for treating Alzheimer’s and the disease itself still poorly understood, it is hard to predict the likely stock market beneficiaries at this stage. Drug development is often prone to setbacks and fewer than 10% of all drugs successfully progress from laboratory to full commercialisation. Moreover, beyond start-ups or smaller biotech businesses, no major pharma business has dedicated its research and product development efforts exclusively to finding treatments for Alzheimer’s. Biogen, Eisai and Pfizer are the listed businesses responsible for the distribution and development of the major Alzheimer’s treatments currently available. Eli Lilly, Novo Nordisk and Roche are among those working on new solutions at present. Given the opportunity, expect more to follow.

Alzheimer’s is certainly a wretched disease and wrenching for all those involved. The bleak projections of those that will be affected should also make treatment of the disease a priority for health systems around the world. Beyond all the capital (both intellectual and monetary) that is focused on developing solutions, if there is cause for optimism, then it may lie in the fact that lifestyle decisions can have a positive impact. Prospects for avoiding dementia appear lower than a generation ago. Better cardiovascular health and more sleep may help. If possible, don’t smoke, drink less alcohol and take more exercise. Drug treatments matter, but so do broader strategies for how to outlive.

22 April 2024

The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Heptagon Capital is an investor in Novo Nordisk. The author of this piece has no personal direct investment in the business. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.

Alex Gunz, Fund Manager, Heptagon Capital


The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital LLP believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital LLP, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital LLP is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital LLP disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document. 

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