Feuerstein's Biotech Mailbag

Welcome back to the biotech mailbag. I really appreciate your emails, so please keep them coming.

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Before I get to the letters, I want to share some back-of-envelope math that really opened my eyes. There are now more than 5 million people in the U.S. living with Alzheimer's disease and that terrible number is growing fast, according to a new report issued this week by the Alzheimer's Association. If you haven't read the eye-opening report, it's worth checking out.

Alzheimer's is a tragic disease, and the personal and economics costs are huge. But there's an incredible opportunity out there, too, for the drug company that finally develops a treatment to halt or reverse the progression of Alzheimer's. Unfortunately, drugs today treat merely the symptoms.

A disease-modifying drug for Alzheimer's is certainly a holy grail. Consider that Pfizer's(PFE) Aricept, with only marginal efficacy at treating disease symptoms, brings in more than $1 billion in annual sales. That means a real disease-modifying drug would probably be a super-blockbuster. No wonder companies such as Wyeth(WYE), Elan(ELN), Eli Lilly(LLY) and others are investing so much time and money in the field. (I've written about the Alzheimer's programs at Neurochem(NRMX), in January, and Myriad Genetics(MYGN), in February, for those interested, but I'm not so optimistic about their chances.)

Consider this just a thought experiment, but take a look at the table I put together below to get a rough idea of the revenue potential of a "super-duper" Alzheimer's drug:

Super-Duper Alzheimer's Drug Revenue Model
	2007	2008	2009	2010	2011	2012
Total U.S. population with AD (MM)	5.00	5.05	5.10	5.15	5.20	5.26
% AD patients treated	25%	30%	35%	40%	45%	50%
AD patients treated (MM)	1.25	1.52	1.79	2.06	2.34	2.63
market share	5%	15%	30%	50%	60%	70%
daily cost ($)	6.00	6.00	6.00	6.00	6.00	6.00
sales ($MM)	136.88	497.68	1,172.86	2,256.36	3,076.55	4,028.00

It's not hard to get to some really big numbers, and that's just for a drug sold in the U.S. alone.