Finishing Last Banks Huge Biotech Gains

In the biotech industry, you don’t always have to be the first to market with a new way to treat disease.

Many times, the biggest fortunes are made by coming second — or even third — if your product is the best.

For example, when Gilead launched a drug combination (Sovaldi/Harvoni) for treating hepatitis C in 2013, none of the new drugs in the cocktail was the first in their class. But they were best in their class and generated over $12 billion in sales in 2014 — the first full year after launch.

When AbbVie’s Humira was approved for treating rheumatoid arthritis at the end of 2002, it wasn’t the first TNF inhibitor to hit the market — but it still pulled in $16 billion last year.

And Pfizer’s Lipitor wasn’t the first cholesterol-lowering statin to enter the market, but it still racked up $13 billion in 2006.

That kind of success is possible for many new companies, too.

Old Problem — A New Breakthrough

One such company is working on treating one of the biggest unmet medical needs in the world: Alzheimer’s disease.

Millions of people have this disease, and millions more will be diagnosed with it in the years ahead as Americans get older.

But only a handful of drugs exist on the market for Alzheimer’s… and none of them does more than treat symptoms.

However, some companies are developing technology designed to get at the roots of the disease — and potentially halt its progression.

The first-in-class drug may come from a Big Pharma called Biogen. Biogen bought its drug from a small company back in 2007 for $380 million.

In clinical trials it shows that it can help Alzheimer’s patients.

Unfortunately, the dosing for this new drug has to be controlled. It’s toxic at doses where it could do a better job of clearing the accumulation of protein plaques in the brain that are believed to cause the cell death at the heart of Alzheimer’s.

To improve on this, one company began to study the mechanism for removing these proteins, called amyloid beta. It has identified a group of misfolded, replicating amyloid proteins as culprits in this disease. It has designed therapeutic molecules that more precisely target the misfolded proteins than Biogen’s drug.

Researchers believe this will mean superior drug performance. Better precision will allow for fewer side effects and higher dosing.

Being First Is Overrated

Biogen may end up with a first-in-class drug, but if other companies are on the right track, we could soon see a new best-in-class drug brought to market very soon.

And that would mean billions in annual sales for any biotech company that is able to supplant itself ahead of Biogen in this space.

And since this particular advancement has the potential to help millions, you could truly feel good about the profits you may see.

Stay tuned for more as this trend continues to develop and more trial data become available.

To a bright future,

Ray Blanco

Ray Blanco
for The Daily Reckoning

The Daily Reckoning