Shares of Wyeth and Elan surged Monday on the promise of a new Alzheimer's drug.
Kris Jenner, M.D., lead portfolio manager for the T. Rowe Price Health Sciences Fund joins the panel for this conversation. Following is a summary of his main points.
Tell us about the drug.
AAB-001 is probably the most advanced product for Alzheimer’s, Jenner explains. And we’re going to get information over the next two months that will tell us about the probability of its success in Phase 3 trials.
The market is excited because there are approximately 7 million Alzheimer’s patients in the US and Western Europe. If only 1 million of those individuals get on this therapy at $10,000/ year that’s a 10 billion dollar drug!
Is it a cure?
It is not, replies Jenner. But it has the opportunity to really delay the very devastating effects. While not a cure, it could be a tremendous advance forward.
What are the odds it will make it to market?
I think the probabilities are good, replies Jenner, greater than 50/50. But we’re at a pivotal point so buyer beware. However, I think the upside here is unlike many other pharma opportunities.
Which comapny benefits most?
Elan will have much higher reward but also higher risk, he says. With Wyeth you would participate but not have the same upside. We have a larger position in Elan
On a related note, Myriad and Lilly also have other Alzheimer’s drugs in the pipeline and could also be worth a look, adds Pete Najarian.
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Trader disclosure: On Apr .7, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (YHOO), (MSFT); Pete Najarian Owns (AAPL), (NOK), (YHOO), (NVS), (XLF); Pete Najarian Owns (AA) Calls, (CHK) Calls, (MSFT) Calls, (BHI) Calls; Finerman Owns (GS); Finerman's Firm And Finerman Own (CROX); Finerman's Firm Owns (FLS), (MSFT), (YHOO); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM); T. Rowe Price Owns 1% Or More Of (MYGN): Guy Adami's Wife Works At Schering-Plough