The ALS Ice Bucket Challenge: Biotechs Capitalize on a Social Media Craze

Throughout the summer, many of us have become familiar with the ALS Ice Bucket Challenge -- a movement instituted by the ALS Association in order to raise funding and awareness for ALS. Also referred to as Lou Gehrig’s disease, ALS is a progressive neurodegenerative disease affecting the nerve cells within the brain and spinal cord, and eventually results in patient death. Afflicting roughly 30,000 Americans at any time, ALS has often fallen under the radar in the eyes of biotech and pharmaceutical companies, who usually target diseases that have a larger treatment demographic. While struggling to raise research funds on their own, the ALS Association has historically experienced difficulty convincing these drug manufacturers to undertake new research efforts directed at curing the niche disease. To date, the only drug on the market addressing ALS is Rilutek -- a product only meant to prolong the lives of those with the disease. Originally produced by Sanofi, Rilutek was eventually divested to Swiss pharmaceutical company Covis Pharma Sarl due to slim margins and lack of potential growth.

Having garnered an unprecedented increase in attention with the introduction of the challenge, the ALS Association was able to raise roughly $80 million from July-August alone, compared to $2.5 million during the same period the previous year. As a result, several mid-large cap biotech companies have dedicated more of their research spend towards finding a cure for the disease. Specifically, Biogen Idec Inc. reaffirmed their support for finding a cure after their experimental drug dexpramipexole failed a Phase III study in early 2013. The company is currently reevaluating data from the study in a new effort to target the disease. In addition to Biogen, Avanir Pharmaceuticals, Isis Pharmaceuticals, Bristol-Meyers Squibb, Brainstorm Cell Therapeutics, and Neuralstem Inc. all have treatment options in their respective pipelines that have the potential to reach market within the next 1-2 years. In particular, Neuralstem offers perhaps one of the most compelling and revolutionary treatment options with the use of neural stem cells, and the company has the potential to utilize the technology for treatment outside of ALS.

Personally, I am skeptical of the potential for these treatment options to hit market. Fundamentally, the treatment demographic of ALS has not changed, and now with several companies competing in the space, any effective treatment option would undoubtedly experience margin pressure as additional treatment options are introduced. Although the amount raised since the introduction of the Ice Bucket Challenge for the treatment of ALS has been admirable, biotechs are unlikely to continue research as funding begins to slow and these companies are forced to front their own cash for ALS research.

-Dillon Cumming