In this article, I will make a comparison between available treatment for Parkinson's disease, and a few new options that might soon be available in the market. While describing the potential market for these options, I will also show that, with some due diligence, these new options can offer interesting investment plays for the risk-savvy investor.
Nearly 1 million Americans are currently affected by Parkinson's disease, which is caused by the death of dopamine-generating cells in the brain. The total number of new cases of Parkinson's detected each year in the US is approximately 60,000. Approximate cost of treatment per person per year is $2,500. A therapeutic surgery can cost up to $100,000 per patient. According to the Parkinson's Disease Foundation, the cost of the disease to the US economy is approximately $25 billion a year.
There is no cure for Parkinson's disease. Treatment goal is symptomatic. Medications currently available duplicate the effect of dopamine, increase their levels in the brain or just extend the action of dopamine in the human body system, mainly in the brain region. The currently available treatments neither cure the disease nor stop it from advancing. Current treatments only allow mitigation of symptoms by using levodopa and dopamine agonists. However, over time the drugs become ineffective. Once the drugs become ineffective, doctors usually change the type of medication, increase the dose, change the amount of time between doses and/or how the medicine is taken. The treatment for this disease is very individualized, and the patient needs to work very closely with his/her doctor.
The two main types of drugs used by doctors to treat Parkinson's are Levodopa and Dopamine agonists. Levodopa is a chemical which is converted to dopamine in the body. It basically attempts to replace dopamine levels in the body artificially. Stalevo, a drug produced by the Finnish company Orion Corporation and marketed by Novartis (NYSE:NVS), uses Levodopa as its main chemical. The other drug that is used by doctors is the Dopamine agonists. The Dopamine agonist acts like dopamine to stimulate nerve cells in the brain. ReQuip, a medicine produced by GlaxoSmithKline (NYSE:GSK), is one of the major medicines that uses Dopamine agonists. GlaxoSmithKline has also collaborated with Impax Pharmaceuticals, the branded products division of Impax Laboratories, Inc. (IPXL), to develop a levodopa-based drug temporarily labeled IPX066 or RYTARY. The company has submitted the drug to the FDA for approval and is working with the FDA for required clearances to test the drug and start its commercial production. Analysts' expectations are that annual sales of the drug may reach $400 million a year. The drug has been licensed to GSK for territories outside US and for Taiwan.
Side Effects of Drugs
All these medicines have numerous side effects for patients. Most common side effects that are faced by patients that use these medicines are abnormal muscle movements, problems controlling muscle movement and nausea. Levodopa is known to increase the risk of involuntary movement. Also, Levodopa's effectiveness decreases over 4 to 5 years and medicines need to be changed. Over health concerns, The Food and Drug Administration (FDA) had pulled dopamine agonist pergolide (Permax) from the market in 2007. The risks included potentially fatal heart valve damage. GlaxoSmithKline recently lost a case against a patient using ReQuip for major side effects that were caused to the patient after using the drug.
Stalevo is known to have side effects of diarrhea, muscle or bone pain, confusion and anxiety, amongst various other such side effects. Similarly, Requip sometimes causes fainting or brief loss of consciousness, hallucinations, heartburn, stomach pain and other side effects.
Alternate Methods to Cure Parkinson's
These side effects of the medicinal treatments currently available make a strong case for the medical reseach world to come up with alternative methods to not only treat the symptoms without any side effects but also to cure the disease. The primary method suggested by doctors to cure treat Parkinson's disease is through medication. However, there have been other treatments that are being tried out by the doctors. One such treatment is therapeutic surgery. The surgery is called deep brain stimulation. In this type of surgery, the doctors implant electrodes into a specific part of your brain. The electrodes are connected to a generator which is implanted in the patient's chest. This generator sends electrical pulses to the region in the brain where the damage may have occurred. The most important thing to note is that deep brain surgery is not a cure. It only gives the patient better control of the symptoms of the disease.
However there has been a growing consensus amongst the scientific community that the cure for Parkinson's disease will come from stem cell research. There have been many advances in research trying to apply stem cell therapy to cure Parkinson's disease. Stem cells have been used to research how the nerve cells work and how Parkinson's disease actually develops. Many therapies are being tried and tested to replace or repair the damaged cells and tissues. Effectively, once successful, stem cells can be used to replace the damaged nerve cells and fully cure the disease. However, ethical dilemmas and restrictions imposed by government agencies have been a hindrance to the research.
New Companies Researching Stem Cell for Parkinson's Cure
Founded in 2001, International Stem Cell Corporation (OTCQB:ISCO) is a California-based biotechnology company that focuses on the therapeutic applications of human parthenogenetic stem cells (hpSCs). It currently does research on using stem cells to cure Parkinson's, liver damage and cornea tissue implants. Parthenogenesis, the technology used by International Stem Cell Corporation, creates pluripotent human stem cells from unfertilized oocytes (eggs). Thereby it avoids ethical issues surrounding the use of fertilized eggs for research. They also use a proprietary technique for creating histocompatible stem cells, significantly reducing the risk of incompatibly and cell rejection, and use unfertilized human eggs, that results in the cells inheriting a duplicate set of human leukocyte antigen (HLA) genes, and the risk of the body of the patient not accepting the cells is significantly reduced.
The company recently announced that it has "positive results demonstrating the safety and efficacy of stem cell engraftment in a primate model of Parkinson's disease." The studies were designed to check the viability, fate and functional efficacy of the stem cell derived neural cells after implantation to the brain. These studies were conducted on African monkeys and rats. The company stated that this study represents the first step in using stem cell based therapies for clinical trials.
Let me quickly put a few positives for the ISCO treatment in a bullet list so you can see what interests me:
- It is a cure of the underlying disease and not mere mitigation of superficially observable symptoms. The cells that will be grafted into the patient will contain the DNA to produce the required dopamine chemical. This is a far safer and better option compared to externally administering dopamine agonists or chemicals that get converted into dopamine.
- It uses cells from unfertilized eggs, therefore, there are no ethical issues associated with the cell source.
- The cells created using the company's proprietary technique are designed to be compatible with the immune system of the patient and hence, are not likely to be rejected by the patient's body upon introduction.
- The fact that the tests have shown positive results using primates, which are genetically closely related to humans, suggests that success upon administering the same test on humans is very likely.
However, one should note a few cautions about the study before reading too much into it. Let me make a quick list of some of the areas investors need to be cautious about:
- This pilot study's results are very encouraging, however, it is important that these results can could be replicated by other researchers working in this field. The company has secured patent protection for its unique technologies, though.
- Further studies are required to increase confidence regarding the use of stem cells in humans before clinical trials can be initiated, since this is an important first step.
- It is important that large-scale quantitative research is carried out to bolster the evidence regarding the safety and efficacy of using pluripotent stem cells.
International Stem Cell Corporation is also creating a stem cell bank to make its hpSCs available for research and commercial use. In a recent press release the company stated that it had "expanded stem cell bank to a total of fifteen human lines by adding three new cGMP-grade stem cell lines"; "developed a new protein-based technology to derive iPS cells without the use of viruses" and "received a key patent issued by the USPTO covering the creation of liver and pancreas precursor cells".
International Stem Cell Corporation also has a wholly owned subsidiary, Lifeline Skin Care, which builds skin products using the parent's company's research and expertise to generate additional revenue for the company. Lifeline Skin Care products are unique in the sense that they contain human, non-embryonic stem cell extracts. In these products, stem cells are an active ingredient, and rejuvenate skin cells. This subsidiary, in fact, is very important for the growth of International Stem Cell Corporation. For the three month ended December 31, 2012, the total sales for the company were $1.25 million compared to $1.06 million for the same period in 2011. However, of the total revenue generated, Lifeline Skin Care (LSC) and Lifeline Cell Technology (LCT) accounted for 48% and 52% of total revenue. Lifeline Cell Technology develops and manufactures purified primary human cells and optimized reagents for cell culture. It is a wholly owned subsidiary of International Stem Cell Corporation.
For 12 months ended December 31, 2012, International Stem Cell Corporation's total sales were $4.57 million compared to $4.53 million in the previous year.
Founded in 2002, Amicus Therapeutics (NASDAQ:FOLD) is another company that is involved in developing therapies for the treatment of human genetic diseases. The company focuses on discovering, developing and commercializing orally administered, small molecule drugs known as pharmacological chaperones. Treatments provided are for variety of diseases such as lysosomal storage diseases and diseases of neurodegeneration. The company is conducting research on using pharmacological chaperone technology to treat Parkinson's disease. The company's initial focus is on treating patients who are also Gaucher disease carriers. Amicus is conducting preclinical studies to evaluate chaperone AT2101 in mouse models of Parkinson's disease. The company also announced that AT3375, the next-generation chaperone may be used in combination with enzyme replacement therapy (ERT) for Gaucher disease.
With the currently available medicinal techniques only performing damage limitation, the new methods being researched by the smaller companies are very interesting from an investor perspective. If any of these techniques are successful and clear the regulatory hurdles, the windfall will be enormous. These investments represent high risk, high return investment opportunities for investors. However, it is interesting to note that both smaller companies discussed above - ISCO and Amicus - have pretty sound business plans for their size and type.
While Amicus has a number of drug candidates in various trial phases and a strategic collaboration with GlaxoSmithKline, ISCO has a revenue-generating secondary business focusing on the skincare industry and multiple applications for its unique non-embryonic stem cell technology. Their Lifeline Cell -- Skin Care technology accounted for almost 48% of revenue in 2012. Although not a lot of money in dollar terms, I was interested to note that unlike a bunch of fly-by-night pharma companies that operate on make or break strategies, this small company has a fallback option in place while it competes with the big boys to try and win the race to develop cures for CNS-related diseases. This sort of business planning immediately lowers the risk of investing in the company as compared to, say, a drug company that is doing R&D for the last 5 years, has zero revenues and very high operating costs, and whose survival depends on whether their sole drug candidate will make it through rigorous trials and approval processes.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.