A blood test could detect early Alzheimer’s disease. This could make these 2 stocks hot buys.

One thing that can help treat any disease is early detection, and Alzheimer’s is no exception. And the good news is that in the near future, detecting cases of Alzheimer’s disease could simply involve a blood test.

A new wave of blood tests involves checking for p-tau217, which is an abnormal protein that can help accurately detect 90 percent of Alzheimer’s cases. Current detection rates are much lower than this, with one study finding that primary care doctors correctly detected only 61% of cases. Although the Food and Drug Administration (FDA) has not yet approved any of these new tests, these are still encouraging developments. These could be game-changers for two healthcare stocks that have approved Alzheimer’s treatments: Eli Lilly (LLY 5.49%) and biogenic (BIIB -1.01%).

Eli Lilly

Eli Lilly is the world’s largest healthcare stock with a market capitalization of more than $800 billion. Investors were bullish on the deal for popular weight loss and diabetes drugs – Zepbound and Mounjaro. But the company also has a promising early Alzheimer’s treatment that the FDA recently approved: Kisunla.

In clinical trials, it has been shown to slow the progression of Alzheimer’s disease by 35% over a period of 18 months. Analysts estimate the drug could generate $5 billion in revenue for the healthcare company at its peak. However, if more patients are able to benefit from it due to earlier detection, then the revenue of the treatment is likely to come even higher than that. The company has other studies underway involving other Alzheimer’s treatments, which could position Eli Lilly for even more growth opportunities in this area.

The company’s deep financial pockets can give Eli Lilly plenty of resources to work with, allowing it to focus on many different growth opportunities. In each of the past four years, the company has generated at least $5 billion in profit. For investors looking to own a great health care stock that may benefit from advances in early detection of Alzheimer’s, Eli Lilly may be a no-brainer buy.

biogenic

A cheaper option for healthcare investors is pharmaceutical company Biogen. Technically, it has two Alzheimer’s treatments that have gotten approval — Leqembi and Aduhelm. But the company dropped the latter because its approval was controversial and Leqembi showed it may be a more effective treatment.

The FDA approved Leqembi more than a year ago after initially approving it through an accelerated approval pathway. Recently, a study found that the treatment benefited patients over a period of three years. The downside, however, is that conditions get worse if patients stop the treatment, which means patients may have to take it forever. But Biogen and its development partner, Come onthey have a monthly version of Leqembi that could be approved by January. And they’re also working on a weekly injectable version that can be administered at home. Currently, Leqembi must be given intravenously every two weeks and is usually either given in a hospital or in infusion therapy centers.

Biogen has a market cap of just $29 billion, and its valuation may be more attractive to value investors. At just 13 times forward earnings, the stock is much cheaper than Eli Lilly, which trades at 57 times forward earnings.

The downside, however, is that Biogen is a slightly riskier investment with much more on the Alzheimer’s treatment. It has struggled to generate revenue growth, and last year its top line was just $9.8 billion — a 27 percent drop in just three years. But if there is a larger patient base that can benefit from Leqembi, Biogen could make an undervalued long-term acquisition.