12 Sep 2017

Med-Tech: Considering Alzheimer’s as an Investment

What is Alzheimer’s Disease?

Alzheimer’s Disease is a type of dementia that causes problems with memory, thinking and behaviour. Symptoms usually develop slowly and get worse over time, becoming severe enough to interfere with daily tasks.

Considering Alzheimer's Disease (AD) as an investment creates possibilities for client and community alike. Before diving into an opportunity, we dissect the markets current position on AD and follow the money.

Alzheimer's Healthcare Burden
Without an effective treatment or cure, AD can become so inescapable it will overwhelm the healthcare system and wreak havoc on the economy with a devastating increase in aged care. Left unchecked, the footprint of the disease will only expand as the baby boomers age.

A direct report from the Alzheimer's Association International Conference in Washington, D.C. conveyed more than 28 million baby boomers will develop AD by mid-century, and the cost of caring for them will eat up a quarter of all Medicare spending in 2040.

Alzheimer’s is our nation’s costliest disease, about $226 billion.

Senator S. Collins

In addition to developing AD; USA Today writes that, on average, baby boomers will live 10 years longer than the previous generation. Carrington College adds that boomers over the age of 65 will rise 73% between 2010 and 2030, increasing stress on healthcare.

Why Isn't Everyone Looking at this?
One thought on why AD is not in everyone's focus would be the complexity of the disease, how and where would you invest? With multiple outlets presenting investable opportunities; cure research, aged care increase, or Healthcare facilities providing treatment.

Dr David Satcher, founding director of the Health Leadership Institute at the Morehouse School of Medicine, says: "While we've had a decline in heart disease deaths, stroke deaths and cancer deaths, there has been an almost 70% increase in Alzheimer's deaths in the last ten years. We invest almost $6 billion a year for cancer and $4 billion for heart disease, but only $500 to 600 million in Alzheimer's Research." He continues to explain the global need for a ‘Wake up call' when addressing AD.

Harry Johns, President and CEO of the Alzheimer's Association, agrees that AD, like cancer, was once largely hidden. "For many years people did not recognise AD, it was treated as normal ageing, as senility," says Johns. Although AD was discovered over 100 years ago, the Alzheimer's Association was not formed until the 1980's, seven decades later.

David and Harry both believe AD does not have a spotlight due to a majority of the population considering AD and natural ageing as synonymous.

Bottom Line
In conclusion, we have narrowed down core areas of opportunity.

  • Medical monitoring equipment
  • Alzheimer unique research and treatment equipment 
  • Automation in healthcare

Med-Tech is an industry we are consistently active in, in fact, we have referenced these core areas of opportunity before. In our OUTLOOK 2010 booklet, we speak about Carol, a true-to-life story about a senior woman living independently at home and how automation in healthcare is helping her daughter assist Carol, her mother.

Staying active in Bio-Tech and Med-Tech commerce is one of the ways we stay one step ahead of the game. So when it comes to Alzheimer's, the million dollar question is; ‘who will make the next big break through?' 

We have recently purchased Biogen Inc., a biopharmaceutical company, which discovers, develops, manufactures, and delivers therapies for the treatment of serious neurological, autoimmune and rare diseases worldwide.

Biogen's Aducanumab has been fast tracked by the FDA, allowing for faster approval.

With a potential blockbuster Alzheimer's treatment in Phase 3 trials, a very undemanding price and strong enough cash flows to support a dividend if it wanted to, we felt Biogen was a bargain. A chance to end the Alzheimer's drought is just icing on the cake.

Source: Dementia Today, Forbes, Alzheimer's Association International Conference (AAIC), Alzheimer's Society, USA Today, Carrington College