Tight FED worries? Look to an easy FDA


Q3 2021

3rd November | 3 mins

Key takeaways

  • An incredible 6.2 million American’s live with Alzheimer’s disease, and Biogen’s drug represents the first actual treatment of the disease, ever.
  • However, perhaps even more interesting is the FDA’s more constructive demeanour.
  • Biotech firms have focused on C-19 Vaccines, slowing FDA activity. But now, they’re back and at a pivotal moment.
In June this year, we saw U.S regulators finally approve Biogen’s newest drug, “Abuhelm”.

It could be the first treatment for the root cause of Alzheimer’s disease. Importantly, this represents the first approval of an Alzheimer’s drug in almost 20 years.

While the FDA has previously approved Alzheimer’s drugs, these were aimed at symptom containment, not to slow the disease itself. This is truly ground-breaking.

Rewind to October 2019 when the initial approval was granted, we witnessed Jim Cramer (love him or loathe him) and David Faber (CNBC anchor) discuss the implications live on air:

David Faber: “You tell me about just how big this drug approval is?”
Jim Cramer “How about it being the biggest ever?”

David Faber “Yes it would”

Back to today and following on from the FDA’s Biogen approval, we’ve seen both Eli Lilly and Roche conducting their own phase III clinical trials for Alzheimer’s treatments. The FDA recently awarded breakthrough therapy designation to two other possible Alzheimer’s therapies that use similar methods as Aduhelm. This means the FDA will likely approve these therapies in the next few years.

Further, the FDA’s decision to green-light these treatments has created significant hope for the large global population of Alzheimer’s sufferers. An easier, more constructive FDA could and should have profound constructive implications for the entire industry, as the regulator’s willingness to approve more treatments provides potentially significant investment opportunities going forward. Back to Jim:

Jim Cramer “More importantly this tells me that the FDA will be fast-tracking many more drugs”
Jim Cramer “It’s a brand new FDA”
Jim Cramer “The FDA has gotten easier!”

Incredibly an estimated 6.2 million Americans are living with Alzheimer’s.

With that number expected to reach 13 million by 20501 the impact for Biogen is big.

But the implications for the industry as a whole are bigger. While the treatment could generate billions in sales — it should open the door for other biotech companies to tackle the disease, driving price competition (it’s currently priced at $56k annually).

Many believed biotechnology would be a beneficiary of the pandemic, but it has actually been an Achilles heel for the industry so far.

The theme has broadly benefited from the ending of lockdowns.

Biotech companies had previously been focused on fighting Covid-19 itself (and on producing vaccines), which led to a slowdown in FDA activity and a subsequent contraction in M&A operations. Creating an industry perfect storm. But now, biotech firms are back in the spotlight and we believe we’re at a pivotal turning point.
"MAJOR DISTURBANCES AND UNUSUAL OCCURANCES" ON US GRID
2000 to 2021


Source: Statista, 2021


Important Information


This financial promotion is issued by First Trust Global Portfolios Management Limited (“FTGPM”) of Fitzwilliam Hall, Fitzwilliam Place, Dublin 2, D02 T292. FTGPM is authorised and regulated by the Central Bank of Ireland (“CBI”) (C185737). The Fund is also regulated by the CBI. Nothing contained herein constitutes investment, legal, tax or other advice and it is not to be solely relied on in making an investment or other decision, nor does the document implicitly or explicitly recommend or suggest an investment strategy, reach conclusions in relation to an investment strategy for the reader, or provide any opinions as to the present or future value or price of any fund. It is not an invitation, offer, or solicitation to engage in any investment activity, including making an investment in a Fund, nor does the information, recommendations or opinions expressed herein constitute an offer for sale of a Fund.




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