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Opinion: With News of Another Failed Trial, a Cure for Alzheimer’s May Have More To Do With Corporate Finance Than Science

By David Wield IV & Heidi V. Pickett | February 22nd, 2019

Last month, Roche announced that they are discontinuing two late-stage Phase III trials for the Alzheimer’s drug crenezumab, citing “disappointing” results. It was a disheartening blow for millions of families desperate for help to slow and, hopefully, cure this horrific disease. It also follows the recent trend of cutting back on in-house Alzheimer’s research and development set by large pharmaceutical companies.

Alzheimer’s is the only top-ten leading cause of death with no known treatment to cure or even slow the progression of disease. It’s also the most expensive disease in the U.S., costing $277 billion in 2018 and as much as $1.1 trillion by 2050. Finding a cure is one of the greatest challenges faced by society today. Yet, without more investment by drug companies that take aim at a wider variety of targets, there will be little chance of heading off the looming crisis that comes with our aging population.

The Struggle to Find a Cure

Will we ever cure Alzheimer’s? That question was posed in a recent article in The New York Times.  It raised key scientific questions facing those working to solve this puzzle: Is Alzheimer’s caused by amyloid buildup or by tau tangles, by genes or viruses, or perhaps all of the above? Is Alzheimer’s even just one disease?

The answers to those questions are complicated. There are hundreds of new scientific papers published each year with no shortage of competing theories for treatment and even cure. Yet, most of these receive little to no investment for drug development and testing in the real world.

The Financial Obstacles to a Cure

In fact, lack of progress in the fight against Alzheimer’s likely has more to do with the world of finance than the world of biology, as critical avenues of research may never be pursued by drug companies due to business model considerations of profit potential and investment risk. It’s what the industry refers to as the investment “Death Valley.”

Each year, government- and charity-funded Alzheimer’s researchers at universities and nonprofit labs identify new promising pathways for diagnosis and cure. With discoveries, it is expected that profit-driven drug companies will invest in developing drugs and treatments for patients.

Adjusted for inflation, it costs 80 times more to develop a new drug today than it did in 1950.

Even though companies can make a lot of money with a successful Alzheimer’s drug, taking a single promising discovery from the lab to the patient is expensive and risky. It requires millions of dollars to develop an effective drug which can pass the blood-brain barrier, then as much as ten million or more for a Phase I clinical trial to test safety, then ten to twenty million for a Phase II clinical trial to see if there is any evidence that the drug can help patients. Over the past 15 years, there were hundreds of early-stage Alzheimer’s clinical trials that did not lead to a drug that companies could sell, creating the current investment bottleneck. Science relies on trial and error; making a profit for investors relies on predictable risk, and the two are often incompatible. As a result, most major pharmaceutical companies have scaled back their Alzheimer’s research and development labs and smaller, scientist-led companies are left struggling for investment to move vital projects forward.

This is a problem for Alzheimer’s, but it is a growing issue for progress with other complex diseases as well. The average cost of developing a new drug, per billion U.S. dollars spent on research and development, has doubled roughly every nine years since 1950. This relationship was dubbed ‘Eroom’s Law’ by industry analyst Jack Scannell in 2012. As a result, adjusted for inflation, it costs 80 times more to develop a new drug today than it did in 1950.

Leading researchers believe that the puzzle is solvable; that Alzheimer’s will be cured, but not simply. Like with other complex diseases, an effective treatment will likely depend on the development of an arsenal of innovative solutions, not unlike the cocktail of compounds now used to treat H.I.V./AIDS. According to the U.S. Department of Health and Human Services, there are now 45 F.D.A.-approved medicines for the treatment of H.I.V., a disease that was once an immutable death sentence.

Quoted in The New York Times, Rudolph Tanzi, a leading Alzheimer’s scientist at Massachusetts General Hospital and Harvard, explains how one theory of how Alzheimer’s develops has bottlenecked finding a cure. “We spent too long thinking about amyloid as plumbing — how much do you produce, how much do you clear,”  Tanzi said. “Then we came along and were saying infection is actually driving the amyloid hypothesis. Amyloid’s a match, the tangles are a brush fire being spread as they kill neurons, and the virus is lighting the match.”

Here’s the problem: If the ultimate solution is a cocktail of drugs, there would need to be hundreds of trials testing all manner of drug combinations and variables of doses. Financing this effort in the current investment climate seems far out of reach.

He and other experts suggest that the answer to curing Alzheimer’s might ultimately be a cocktail of medications. “Drugs to hit amyloid early on, drugs to hit tangles early on, drugs to hit inflammation,” Tanzi said to The New York Times. “And you might want to add antivirals.”

Here’s the problem: If the ultimate solution is a cocktail of drugs, there would need to be hundreds of trials testing all manner of drug combinations and variables of doses. Financing this effort in the current investment climate seems far out of reach.

How Much Is the Current Financial Bottleneck Delaying the Discovery of a Potential Cure?

No one can predict the future, but few are better at estimating probability than Andrew Lo, the director of the Laboratory for Financial Engineering at M.I.T. His comprehensive study on portfolio modeling for Alzheimer’s drug discovery identified 64 known targets for drugs. According to Lo, each of these research targets has about a 5 percent probability of success— pursued one at a time, “the wait time for the next approved Alzheimer’s drug is 260 years,” said Lo.

The wait time for the next approved Alzheimer’s drug is 260 years.

In the current investment climate, only a handful of these targets are being investigated in clinical trials. That pushes off the statistical likelihood of a cure well beyond the lifetimes of even our children. If, however, sufficient investment was somehow made possible for all the available research targets to be pursued simultaneously, regardless of potential profit, there is a much better probability that an effective drug would be developed in the next 10 or 15 years.

Does It Make Sense for Millions of Us to Die Waiting Because Drug Companies Can’t Make a Profit Developing a Cure?

To help address this investment bottleneck, Bill Gates and other major philanthropists, working with Dr. Howard Fillit at the Alzheimer’s Drug Discovery Foundation, have set up a $30 million venture philanthropy fund for a “Diagnostics Accelerator.” Donations to the fund will be invested in nurturing early-stage companies working on Alzheimer’s diagnostics, one of the underfunded aspects in the fight against the disease. This venture philanthropy model is a promising step in the right direction, but a more comprehensive solution is needed if we are to see faster progress to a cure.

The Power of Common Need Investment and the Spare-Change Model

Alzheimer’s can strike even in our 40s and 50s, and nearly half of us are likely to get Alzheimer’s if we live to old age. As lifespans expand, finding a cure is an urgent priority for most all of us.

While the profit-driven investment model for Alzheimer’s research and development may be broken, we all have a “common need” for a cure. Wouldn’t it make sense for us to invest a small amount each month, say just our spare change, so that companies working on developing a promising pathway to a cure, can proceed with this vital work without delay? This investment may or may not be financially profitable, but increasing the chance of saving our own lives and the lives of our loved ones seems well worth a small investment.

Even if a small percentage of people invested spare change in smaller, scientist-led companies working on a cure, that would result in billions in new investment for priorities otherwise overlooked by large companies. As investors, people would directly own shares in these companies. With millions of spare-change investors participating, ownership of drug companies would transition from profit-driven investors to spare-change investors, ensuring that cure becomes a priority over profit.

We coined this new investment model ”Common Need Investment,” or CNI, which refers to investments made in a company based on its pursuit of essential work valued by the investors above financial profit or loss.

Common Need Investment is something each one of us can do by simply speaking to our investment advisors about dedicating a small portion of our discretionary income for investment in companies working on promising Alzheimer’s projects. As this can get quite complicated, we have joined the efforts of many leading researchers to create a unique spare-change investment platform, called InvestAcure, to make this process easier.

Twenty-six percent or 70 million adults in the U.S. alone have a relative with Alzheimer’s, according to Ken Dychtwald, Chairman of the Alzheimer’s XPRIZE. If just 1.5 percent automatically round up their daily transactions to the nearest dollar and invest the “spare change,” that could total $600 million annually—that is 20 times Bill Gates’ ADDF effort, repeated every single year. At a 15 percent participation rate, the number jumps to $6 billion annually or a staggering $30 billion over five years. Can a cure be far behind?

Heidi V. Pickett, Assistant Dean of the MIT Sloan Master of Finance Program and InvestAcure board member—recognized expert on corporate development, business strategy, and global operations.

David Weild IV, Co-founder & Vice Chairman at InvestAcure, PBC – CEO & Chairman at Weild & Co, Former Vice Chairman of Nasdaq, considered “The father of the JOBS Act.”

The authors are affiliated with InvestAcure and the information provided here reflects their opinions.

 

4 thoughts on “Opinion: With News of Another Failed Trial, a Cure for Alzheimer’s May Have More To Do With Corporate Finance Than Science

  1. I think the frame of “this is going to take forever, something needs to be done” is correct. $600 million a year, while better than $60 million a year, is still not enough to tackle this problem. I wonder if the authors every considered that shifting savings from care costs ($2.5 trillion in the next decade, $6 trillion in the 2040-2050 decade) to a cure could free up the hundreds of billion that are needed to find a cure. This presumes that you could create such savings from care costs, which is absolutely the case. Ceresti is working on this and has compelling proof of concept cost savings data.

  2. The logic makes sense. Even more, what is the fall back? Everyone in the private sector is pulling out. Even if the total investment in curing it approaches $100 billion, it is worth it.

  3. I have spent twenty years trying to get funding for a novel treatment for Alzheimer’s. We have an inhibitor of antibody receptors (called Fc Receptors) based on the following experimental observation: “Immunoglobulin G Fc receptor deficiency prevents Alzheimer-like pathology and cognitive impairment in mice” https://academic.oup.com/brain/article/135/9/2826/327401 and other published research.

    I was recently at a meeting with a big pharma company VC group and asked them about their interest in a novel treatment for Alzheimer’s and their answer was “we’re not interested in any novel treatments for Alzheimer’s disease due to the high cost and failure rate”.

    For a biotech startup, the hardest thing is going from lab bench to patient bedside (biotech’s “valley of death”). For a biotech startup trying to develop a novel treatment for Alzheimer’s, that valley of death is bigger than the Sahara desert.

    As you point out, the high cost of drug development, coupled with the high failure rate of past Alzheimer’s drug candidates makes the development of a new treatment for Alzheimer’s very difficult.
    My thoughts and prayers are with you.

  4. It is a Liberal dream that you can fix things if you chose to pay for it. Science does not work that way. What we should be doing is euthanasia for old people when their mental faculties become severely affected. The hope of curing Alzheimers is a pipe dream. It is one of those conditions that is as perplexing as most other conditions of the brain. There are a number of hacks that want to steal your money in pursuit of this “worthy (but hopeless) endeavor. The fact is that most medical research is grossly OVERFUNDED.
    My father died of Alzheimers and should have been put down two years before he actually died (it was miserable for both of us, I had to care for him until his condition forced him into a facility). My brother has become afflicted with ALS and is probably will not live out the year and is contemplating suicide (he says he has zero quality of life left and is ready to die although his wife is in denial and is trying to push him to stay active–which is only adding to his discomfort) as there are no euthanasia facilities available and he lives in another country. I am not going to go to prison in a foreign country helping him die against the wishes of his wife. I would take the risk in our own country…my prison sentence would probably be relatively short (we have jury sentencing in my location where there is common sense-most judges can’t be relied on) and I could be visited by my children.
    But STOP engaging in fantasies! You are hurting more than you are helping.

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