Wall Street is celebrating the first approval of Alzheimer’s disease treatment in almost 20 years. Familiar threats may reappear, but investors are not surprised.

Drug Aduhelm on Monday. There is a serious controversy over approval. An external committee of experts gathered by the FDA recommended not approving the drug last year. Later, three members of the committee resigned from a decision that one of the former members called a blunder.

Stock prices are rising, with or without dust. That day, Biogen’s share price rose 38% and the rest of the sector rose.Eli Lilly,

LLY -4.05%

A similar treatment for Alzheimer’s disease is under development, with a 10% recovery on Monday. The Nasdaq Biotechnology Index rose 6% this week.

There is reason to expect this trend to continue. Alzheimer’s disease has been a particularly confounding corner of drug research for decades. A 2018 analysis found that 146 experimental drugs failed clinical trials in the last 20 years.

In no time, its history suddenly became almost insignificant. Despite serious concerns about the effectiveness of Aduhelm, the FDA’s decision to approve Aduhelm changes the outlook for these research efforts. Drugs that reduce the accumulation of substances known as amyloid, such as Aduhelm, are likely to be on the market today. Even the perceptions of more tolerant regulators are sufficient to stimulate new enthusiasm for biotechnology, as well as companies implementing programs for Alzheimer’s disease. For example, regulatory flexibility boosts the outlook for the biotechnology business working on the development of drugs to treat rare diseases.

But things can get even more complicated as the midterm elections approach. Biogen’s drugs, which are already highly controversial, are listed for $ 56,000 a year. In addition, most patients with this disease are eligible for Medicare. This means that taxpayers will bear most of the bill.

The threat from politicians to crack down on high drug prices before the election has recently sunk this sector. The index for small biotechnology stocks fell by about 50% in late 2015.

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Investors should not dismiss the possibility of a sequel, but that is not the most likely result. This time, politicians may not be in a hurry to criticize the price of Aduhelm. After all, there are more than 6 million people with Alzheimer’s disease in the United States, and far more are helping to care for people with Alzheimer’s disease. It is a large group of voters who are desperately waiting for appropriate treatment options of all kinds.

In addition, the 2015 explosion occurred in the highest-ever sector, while recent trading has been fairly modest. The biotechnology index is up 7% this year, 6% below the record set in February, compared to 13% for the S & P 500.

Don’t worry about politicians. It’s time for investors to agree with drugs.

Write to Charlie Grant (charles.grant@wsj.com)

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