How we can profit from winning the battle against ageing
We’re now living longer than ever – only to suffer from diseases of old age. New therapies promise a new lease of life for the elderly – and big profits for investors, says Matthew Partridge.
Over the past century, average life expectancy in most countries has grown substantially. Vastly lower infant mortality, improved living standards, better public sanitation, and the discovery of cures or vaccines for many once-deadly diseases, have seen average life expectancy in most developed nations rise to around 80, compared with 50 in 1900. Developing nations have benefited too. Life expectancy in China, for example, was just 43 in 1960 it's 75 today. Indeed, according to the World Health Organisation, no individual nation outside Africa now has a life expectancy of below 60, and even Africa has seen huge gains since 2000, helped by improved anti-malarial measures and wider availability of HIV/Aids treatments.
However, the pace of progress is slowing. From 1900, it took less than 30 years for life expectancy in the US to rise from 50 to 60 years. It took another 40 years to rise to 70, and now, nearly 50 years later, it is still hovering at just below 80. The problem is that while we've largely beaten the diseases that used to kill people in childhood, early adulthood and even middle age, we're having much less success in prolonging the life of the elderly. Here's a stark illustration: in Britain in 1840, if you made it to 65, you could expect, on average, to die at age 76. In 2011, a 65-year-old could expect to die aged 83. In other words, today you have a far better chance of living to 65 than you did 170-odd years ago. But if you do, your remaining life expectancy won't be much greater than that of your 19th-century peers.
Of course, the elderly now die for different reasons. In 1900, the biggest killers of the over-65s were influenza and tuberculosis, both now relatively easy to avoid and to treat. Today's elderly mainly die of cancer, heart disease or strokes, while dementia (of which Alzheimer's is the main form) limits the quality of life of huge numbers of older people. The prospect of dying from any of these is unpleasant enough, but there are also wider implications for society at large. Low and falling birth rates in many countries raise the spectre of shrinking populations of young and healthy people struggling to support a large and growing group of the elderly and infirm.
The good news is we may be on the cusp of major breakthroughs in the way we deal with cancer, heart disease and even dementia. Indeed, the UK's Office for National Statistics predicts that a third of children born in Britain today will live to be at least 100. And in the longer run, new treatments may even slow down the ageing process itself a radical shift that would see older people retain both their ability and desire to work for far longer than we might expect today. So how do these potentially life-changing advances work, and which sectors offer the best opportunities for investors?
A cure for cancer
Cancer is the second-biggest cause of death in the over-65s, according to the US Centre for Disease Control (CDC). Meanwhile, Cancer Research UK estimates that half of us will get cancer at some point in our lives. Thankfully, mortality rates at all stages of cancer development are falling gradually, but experts all agree that the key to reducing the number of deaths is to catch the cancer early. For example, as many as 75% of those diagnosed with 1A (early onset) non-small-cell lung cancer live for at least another five years. However, if the disease isn't caught until it progresses to stage 3B, the figure is less than 10%.
The traditional approach has been to use a combination of X-rays and MRI scans to spot cancer cells as they grow. But this is costly, and false-positives abound, forcing doctors to carry out additional expensive, invasive procedures, such as biopsies, which they may be reluctant to prescribe. Now, however, many companies are developing simple blood tests that can alert doctors to the presence of malignancies. This reduces the number of false-positives and also means that testing canbe carried out routinely on many more people.
One of the most advanced approaches is the Parsortix system from Angle. This looks at the number of circulating tumour cells, which cancers send around the body to help them spread. A similar approach by Swansea University Medical School, costing just £35 per test, measures the number of mutated cells in the subject's blood. While this is currently focused on oesophageal cancer, the researchers hope it could easily be adapted to combat other cancers too.
Along with improved diagnostic tools, treatment methods are evolving beyond chemotherapy and radiotherapy. The most promising of these is immunotherapy, which uses the body's own immune system to attack cancerous cells. There are three main approaches: one is to develop antibodies that can stimulate the immune system to attack cancer cells (the "vaccine" approach). Another is to produce drugs that disable the cancer cells' defences, leaving them vulnerable to the immune system. Finally, some scientists are trying to modify white blood cells so that they are more effective in tackling cancer cells. We look at some listed firms working in the field below.
An end to Alzheimer's
Alzheimer's and other forms of dementia affect huge numbers of people a third of all over-80s have some form of dementia, estimates the US CDC. This has two key effects. Firstly, Alzheimer's is a major killer in its own right the CDC says it is the fifth-biggest killer of over-65s in America. Secondly, even where it is not directly responsible for death, dementia has a devastating impact on the quality of life for sufferers and their carers, and it also drives up care costs sharply. A 2014 report by the London School of Economics and King's College London put the total cost of dementia to the UK at £26.3bn a year.
Today's treatments focus on tackling the symptoms, rather than significantly slowing the progress of the disease. Even the most advanced treatments can do little more than temporarily boost short-term memory, and no new Alzheimer's treatment has been approved in more than a decade. Yet the good news is that money is being poured into the field nearly $1bn a year in the US alone. This investment is now starting to pay off. One promising approach is to use antibodies to target the plaques in the brain that are associated with Alzheimer's and dementia. Early results suggested that this approach had little impact. But more recent trials suggest that it may work if patients are given the drug early enough. Two particularly promising drugs are solanezumab, produced by Eli Lilly, and Biogen's aducanumab. Both are now undergoing advanced trials that could see them hit the market within a few years.
Another approach is to use adult stem cells to reverse the damage caused by Alzheimer's. Researchers at the Miller School of Medicine at the University of Miami have shown that injecting adult stem cells into mice with the disease removed the plaques and even caused brain cells to regenerate, with the mice showing a marked improvement in memory tests. The team is now carrying out early trials to see whether it can produce similar results in humans.
Heart disease the biggest killer of all
Worse still than cancer or dementia is heart disease, the biggest cause of death for all ages (not just the over-65s), killing 370,000 people a year in the US. Some estimates put the rough cost of heart disease to the global economy at nearly $1trn a year. Advances in medical devices promise to improve the management of heart disease. Pacemakers and implantable defibrillators help to regulate the heartbeats of those with heart problems, but they involve major surgery and the risks that entails. However, in April the US health regulator, the FDA, approved the Micra, the first miniature wireless device that can be inserted into the heart via a vein, cutting the risk of subsequent complications.
While better medical devices are key to managing heart disease, the most interesting research looking at potential cures involves adult stem cells. In the short run, the hope is that stem cells could reverse damage caused by heart attacks. In April, researchers at Cedars-Sinai Heart Institute found that regular injections of bone marrow cells into the hearts of patients with advanced heart disease reduced death rates and improved overall quality of life. For the longer term, researchers at Massachusetts General Hospital and Harvard Medical School have used modified skin cells to grow primitive, beating human hearts. This raises the possibility that replacement hearts could eventually be used in transplants.
Stopping ageing itself
Dealing with individual conditions is key to improving quality of life. But many experts believe that there is a natural limit to the human life span. Neurobiologist Sir Colin Blakemore estimates that, even with perfect medical care, people will never be able to live beyond the age of 120. Regardless of how healthy you are, day-to-day life takes its toll on the body. A normal body repairs itself using cell division. But there is a limit to this process, which is why the elderly find it increasingly hard to recover from even minor injuries. Scientists believe these limits to cell division are caused by telomeres, which protect human chromosomes. Each time a cell divides, the telomere gets shorter, eventually leaving the chromosomes unprotected, and vulnerable to mutation. However, last year researchers at Stanford University School of Medicine re-engineered a cluster of cells, extending the length of their telomeres, potentially delaying the point at which the body starts to degenerate.
Another approach comes from research into calorie restriction (fasting). It has long been known that restricting the calories of animals in laboratories can boost their life span greatly by slowing down the pace of cellular mutations and encouraging the body to process energy more efficiently. However, the evidence for similar effects in humans is limited, and anyway most people would find following such a diet easier said than done. So instead, many scientists are trying to work on drugs that mimic the effect of calorie reduction on the body. I take a look at some of the most promising firms in each of these fields below.
The five stocks to buy now
Pharmaceutical giant AstraZeneca (LSE: AZN) has been investing in cancer treatments that harness the patient's own immune system for a long time now, starting with the acquisition of Cambridge Antibody Technology ten years ago. Today, its most promising immunotherapy drugs are durvalumab and tremelimumab. Previous trials have suggested that the drugs perform poorly on their own. However, in February a study demonstrated that combining the two had a significant impact on a specific type of lung cancer that is currently considered virtually untreatable. The group trades on a price/earnings (p/e) ratio of 16.3 and is seen as a potential acquisition for Swiss rival Novartis.
A purer play on immunotherapy is Oxford-based Adaptimmune (Nasdaq: ADAP). The company's big idea is to take white blood cells from the patient's immune system, re-engineer them so that they can spot cancers, and then replace the remaining immune cells with the modified cells. Small-scale trials have been so successful that drug giant GlaxoSmithKline has agreed to do a much larger trial involving up to 100 patients suffering from synovial sarcoma, a cancer with a very low survival rate. Adaptimmune is still loss-making, but has enough cash to bring its treatment to market, if successful.
One biotech company in pole position to develop an Alzheimer's treatment is Biogen (Nasdaq: BIIB). As discussed above, its aducanumab drug has produced very positive results in trials and has now been granted fast-track status by the US Food and Drug Administration, which should help it get to market quickly. JP Morgan reckons it has a 50% chance of becoming a major blockbuster and bringing in up to $15bn a year in peak revenues. Both Amgen and Merck are thought to be considering bids for the company, which could boost the price by as much as a third. For now, Biogen trades on a p/e of 14.5.
Wireless medical devices maker Medtronic (NYSE: MDT) has risen by around a third since we tipped it just over two years ago. A recent study has reinforced both the excellent safety record of its Micra wireless pacemaker, and its potential to reduce the time spent in hospital after an operation. It also produces a wide range of devices used to monitor and treat other conditions.This puts Medtronic, which trades on a p/e of 18.2, in a strong position.
Australia's Mesoblast (Nasdaq: MESO) specialises in regenerative medicine and the use of adult stem cells to help the body repair itself. It owns more than 600 patents covering a wide range of conditions. A treatment for advanced chronic heart failure which could be very profitable for the company is in final stage trials just now. The cost of the trials means Mesoblast is currently loss-making, but the company has enough cash on hand to see it through at least two more years.