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Alzheimer's Drug Stocks

Written By Brian Hicks

Posted June 14, 2008

More than 5.2 million Americans have Alzheimer’s disease. Another 7.7 million Americans will suffer with it by 2030, and another 16 million will suffer by 2050. And there’s a yearly price tag of $148 billion to treat these patients.

No one is quite sure what causes the disease that gradually robs sufferers of memory and the ability to care for one self. There’s no known cure, and current drugs are only temporary pain relievers.

So wouldn’t it be nice if the drug companies got it right?

Hopes are already mounting that an experimental drug from Elan and Wyeth can do the trick. If they can clear out deposits called amyloid plaque, or simply halt the production, they could help millions of patients, and potentially see annual sales of $13 billion.

But such theories of anti-amyloid could be based largely on "theory and hope," says University of Southern California psychiatrist Lon Schneider (as quoted by Forbes). "None of the drugs have shown evidence of efficacy yet. Geneticist John Hardy, one of the first to finger amyloid as a suspect, puts the odds at 50-50 that one of the antiamyloid drugs will work."

Plus, says the Forbes report, people that can function normally also have large amounts of amyloid-beta plaque, which casts doubt on whether the plaque is a cause, a consequence, or simply an indication of an aging brain.

While there’s some hope that Elan and Wyeth can help millions of sufferers, and in the end reap millions for shareholders, some drug developers are turning to the theory of oxidative stress, which damages and destroys cells and is believed to be a primary cause of Alzheimer’s disease.

According to, ‘Involvement of Oxidative Stress in Alzheimer’s Disease’ study leader Dr. Nunomura "pointed to extensive evidence of mechanistic and chronological links between oxidative stress and a number of key characteristics of the disease."

The research also suggested that amyloid beta could be produced by the body as it tries to fight the disease, later turning into an accumulating toxic substance. In other words, there’s a belief that if amyloid was removed during early stages of the disease, it could do more harm.

Alzheimer’s Drug Stock: Anavex Life Sciences (AVXL.OB)

One of the companies basing its Alzheimer’s drug on oxidative stress theories is AVXL.OB. Brian Hicks introduced you to this company in November 2007.

The company’s drug candidate, ANAVEX 1-41, uses sigma receptors to stand guard against oxidative stress and repair cells. And when AV-1-41 goes into Phase I trials, we fully expect the market to re-rate the company upwards to $10 to $12 a share.

The drug is already showing promise in early stages. And in some trials, the drug reportedly provided neurons with protection from oxidative stress, prevented amyloid beta from becoming toxic, and reduced memory deficit in animal tests.

We continue to rate Anavex stock as one of our favorite small cap investments for 2008-2009. And the fact that the stock hasn’t sold off – especially during the recent market turmoil – speaks volumes.

Better, we wouldn’t be shocked if Anavex was a buyout candidate.

One, the company is betting that compounds for Alzheimer’s disease based on its Sigmaceptor platforms will provide it with competitive advantages. Its Anavex 1-41 treatment has demonstrated that the compound "significantly" protects neurons by preventing oxidative stress, which can damage and destroy cells and is strongly believed to be a main cause of many neurodegenerative diseases.

In short, if drugs like Anavex’s can slow or prevent diseases like Alzheimer’s there’s no telling how many buyout offers would flood Anavex offices.

Plus, they’ve got another 11 sigma receptor compounds in pre-clinical development, three of which could soon file for investigational new drug applications this year alone. This includes treatments for epilepsy, colorectal cancer and other solid tumors.

Anavex 7-1037 (for colorectal cancers) preclinical trial treatments, for example, shows a 69% reduction (with minimal adverse effects) in tumor growth.

Two, big pharmaceutical companies may not continue overlooking companies with oxidative stress exposure. And three, the Alzheimer’s drug market could triple to $9 billion by 2017. Why wouldn’t big pharma want a piece of that?

Good Investing,

Ian L. Cooper

P.S. We’re reiterating a buy on iDcentrix Inc. (IDCX.OB) at market.

Soon Federal law will require that most people carry these cards if they want to fly on airlines, or even enter a federal building- strict new security measures to protect us from the next 9/11.

Reports show the White House is in the process of bringing in consultants to help figure out how to set up the Real ID distribution process, as well as how to implement new security measures. Sure, the Real ID Act won’t fully kick in until 2011, but the White House needs to jump on the process "that will take a while and cost a lot." It’s a process that could soon splash the iDcentrix name across national newspapers.


In case you missed our other investment opportunity highlights, here’s what we covered in Wealth Daily, Gold World, Energy and Capital, and your free blogs for the week of June 9, 2008.

Precious Metals Mining Stocks: Get Out of the US Dollar Now!
Investors worldwide in various markets appear to have had their fill for market risk after watching their investments lose significant value in recent months. This has been particularly true with the junior mining share market where investors have become skittish in buying shares for the time being as shares corrected beyond what most analysts had expected.

Chinese Jewelry Sales up 36% Yr-on-Yr: Up US$3 Billion Since 2005
Growth of the jewelry industry in China has been developing much faster than anyone expected.

They’re At It Again: Another Dog And Pony Show
So it looks like the Saudis want to hold a summit to discuss how to handle the rising cost of oil, declaring that they will guarantee the availability of oil supplies now, and in the future. Of course they neglect to state how much oil they’re guaranteeing. But I can tell you one thing – it’ll be less than the global demand.

The Impending Oil Export Crisis: Never Mind Peak Oil; Worry about Peak Exports
The problem is simple: Net oil exporters are awash in the cash from their oil exports. As they grow up and continue to industrialize, they consume more of their own production, which cuts into their exports.

Colorado Oil Shale: Don’t Get Caught in This Oil Investment Trap
About a month ago, Goldman Sachs raised their oil price forecast to $141 a barrel during the second half of 2008. The analysts over at Morgan Stanley said crude oil could reach up to $150 a barrel by July 4, 2008. Even Russian natural gas giant Gazprom set their prediction to a whopping $250 a barrel in the "foreseeable future" (whatever that might possibly mean). So in the face of record oil prices, why won’t I invest in the Green River Basin oil shales?

50% Gains for Reading a Blog: Not a bad start, considering we’re only warming up
On June 3, 2008, Lehman had just broken multi-year support. We mentioned that the "best way to trade the possible drop was to buy the October 25 put options (LYHVE)." At the time, the option traded at $3. Today, as LEH breaks $25 to the downside, the put option trades at $4.55 – a 52% gain in days.

The Economy’s Worst Nightmare: Disaster by April 2009?
"With the subprime mortgage crisis already crippling the U.S. economy, some experts are warning that the next wave of foreclosures will begin accelerating in April, 2009."

"Homeowners" Buy and Bail: The Latest Twist in Fraud
Here’s a story from the housing world that is a perfect example of that trait. It seems that a number of upside down homeowners have decided to take matters into their own hands.

UK Recession Investments: Where To Invest As The United Kingdom Stumbles
You know the UK is in trouble when the Organization for Economic Cooperation and Development (OECD) singled out the UK economy with gloom and doom forecasts.

Smart Grid: Smart Investing in the Smart Grid
We knew it was coming. There is simply not enough electricity in New York to satisfy all of its over-heated citizens. Editor’s Note: In addition to the companies mentioned by Nick Hodge, also take a look at Beacon Power (BCON:NASDAQ).