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Are Alzheimer's-Focused Stocks Set for a Financial Windfall?

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In spite of the increasing incidence of Alzheimer's, there is no recognized drug that can cure or slow the progress of the disease. The Alzheimer's Association claims that in every 66 seconds, an American develops Alzheimer's. People living with Alzheimer's find it extremely difficult to carry out daily functions and hence need to be under supervision round the clock.

Coming to other life-threatening conditions, CNBC reports that deaths related to Alzheimer’s have skyrocketed 89% while those following heart diseases have dropped 14% since the turn of the century.

Detection Years Before Onset of Alzheimer's

A blood test has been introduced to detect Alzheimer's almost two decades before a patient shows any noticeable symptoms. Last year, Dr. Randall Bateman of Washington University announced that the test will be able to detect the accumulation of amyloid beta in the brain. The buildup of the toxic protein is among the first signs of the deadly disease.

Also, in January, a team of researchers from Japan and Australia introduced a blood test with accuracy as high as 90% for the detection of the disease. Dr. Bateman employed the mass spectrometry testing for identifying the protein. According to the email of Bateman to CNBC, scientists from Japan had developed an identical mass-spectrometry investigative procedure for protein detection which came up with similar results.  

Blood Tests to Speed Up Drug Research

Clinical trials for drugs that could delay the start of the disease failed a number of times, thanks to the unavailability of a decent number of qualified patients, revealed Dr. Jeff Cummings of the Cleveland Clinic. Hence, the wider the patient base, higher will be the possibility of meaningful clinical trials.

With the new blood tests, doctors will be able to detect patients early and include them in clinical trials for the development of effective preventive treatments. Also, there would be proper utilization of millions of dollars of federal government funding for the preventive treatment.

Importantly, the blood tests will be the most efficient way to detect Alzheimer's as other alternatives are quite expensive. Lumbar puncture for the early diagnosis is among the alternatives that collect cerebrospinal fluid. For the process, a needle is inserted in the lower back of patients, giving rise to the need for local anesthetic. Positron emission tomography is another process that could cost at least $7000. Also, the accuracy of the PET scans is significantly lower than the blood tests.

Dr. Robert Vassar of Northwestern University has also backed the efficiency of blood tests over other methods for the diagnosis of Alzheimer's. Meanwhile, Dr. Bateman added that the blood tests will be more in demand once proper preventive measures have been established.

Stocks to Gain

People all over the world will likely gain access to the tests in the coming few years, per Dr. Bateman.

However, the question that looms large is what is the next course of action for those who find out that they are at a risk of developing Alzheimer’s? Meanwhile, the launch of the blood tests paves the way for advanced clinical trials.

More than 5 million people are estimated to be living with the disease in the United States, per The Alzheimer's Association. Notably, the health organization expects this number to rise more than three times by 2050.

As Alzheimer's is a pressing concern, there is massive business potential in this space. Hence, the launch of the blood tests will help companies focused on developing preventive treatments make billions.

Based in Cambridge, MA, Biogen Inc. (BIIB - Free Report) has been paying particular attention on stepping up research work on Alzheimer’s. The company surpassed the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 6.9%. Also, we expect the company to witness earnings growth of 13.7% and 4.7% in 2018 and 2019, respectively.

It has been almost 30 years that Eli Lilly and Company (LLY - Free Report) — headquartered in Indianapolis, IN — is fighting Alzheimer’s. The company beat the Zacks Consensus Estimate in all of the last four quarters. We also expect the company to post earnings growth of 13.1% and 8.8% in 2018 and 2019, respectively.

In fact, for treating patients with early Alzheimer’s symptoms, AstraZeneca PLC (AZN - Free Report) and Eli Lilly are jointly developing Lanabecestat — a small molecule therapy candidate.

Merck & Co., Inc. (MRK - Free Report) , headquartered in Kenilworth, NJ, has been focusing on research for treating Alzheimer's. The company is expected to post earnings growth of 4.8% and 2.9% in 2018 and 2019, respectively. Merck also managed to beat the Zacks Consensus Estimate in the last four quarters.

Biogen, Eli Lilly and Merck carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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