One thing that can help with the treatment of any disease is early detection, and Alzheimer's is no exception to that. And the good news is that in the near future, detecting cases of Alzheimer's disease could simply involve a blood test.
A new wave of blood tests involves checking for p-tau217, which is an abnormal protein that can help accurately detect 90% of Alzheimer's cases. The current detection rates are far lower than that, with one study finding that primary care doctors only detected 61% of cases correctly. While the Food and Drug Administration (FDA) has not approved any of these new tests yet, these are encouraging developments nonetheless. They could be game changers for two healthcare stocks that have approved treatments for Alzheimer's: Eli Lilly (NYSE: LLY) and Biogen (NASDAQ: BIIB).
Eli Lilly
Eli Lilly is the largest healthcare stock in the world, with a market cap of more than $800 billion. Investors have been bullish on the business for its popular weight loss and diabetes drugs -- Zepbound and Mounjaro. But the company also has a promising early Alzheimer's treatment, which the FDA recently approved: Kisunla.
In clinical trials, it was shown that it can slow the progression of Alzheimer's by 35% over a period of 18 months. Analysts estimate that the drug could potentially generate $5 billion in revenue for the healthcare company at its peak. However, if more patients are able to benefit from it due to earlier detection, then it's possible that the treatment's revenue could come in even higher than that. The company has other trials ongoing in its pipeline involving other Alzheimer's treatments as well, which could position Eli Lilly for even more growth opportunities in this area.
The company's deep financial pockets can give Eli Lilly a lot of resources to work with, allowing it to focus on many different growth opportunities. In each of the past four years, the company has generated at least $5 billion in profit. For investors who want to own an excellent healthcare stock that can benefit from advances in early Alzheimer's detection, Eli Lilly can be a no-brainer buy.
Biogen
A cheaper option for healthcare investors is the pharmaceutical company Biogen. It technically has two treatments for Alzheimer's that have obtained approval -- Leqembi and Aduhelm. The company, however, has given up on the latter, as its approval was controversial and Leqembi has shown that it can be a more effective treatment.
The FDA approved Leqembi more than a year ago after initially approving it under an accelerated approval pathway. Recently, a study found that the treatment did benefit patients over a period of three years. The downside, however, is that conditions worsen if patients stop the treatment, implying that patients may need to take it forever. But Biogen and its development partner, Eisai, have a monthly version of Leqembi that could be approved by January. And they are also working on a weekly injectable version that can be administered at home. Currently, Leqembi needs to be taken intravenously every two weeks and is usually either administered in a hospital or at infusion therapy centers.
Biogen has a market cap of just $29 billion, and its valuation may be more attractive to value investors. At just 13 times its estimated future earnings, the stock is much cheaper than Eli Lilly, which trades at 57 times its future profits.
The downside, however, is that Biogen is a bit of a riskier investment with a lot more riding on its Alzheimer's treatment. It has struggled to generate revenue growth and last year its top line came in at just $9.8 billion -- down 27% in just three years. But if there's a larger patient base that can benefit from Leqembi, Biogen could make for an underrated buy in the long run.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends Biogen. The Motley Fool has a disclosure policy.
