Eli Lilly Alzheimer's Drug Wins FDA Panel Nod, Shares Up 1.8%

Key Takeaway

• Eli Lilly's Alzheimer's drug, donanemab, received unanimous backing from an FDA advisory panel, boosting shares by 1.8%.
• Donanemab showed higher efficacy (35% cognitive decline reduction) compared to Leqembi (27%), but has a higher risk of brain swelling.
• Analysts cut 2030 sales projections for donanemab to $500 million, below the $1 billion "blockbuster" status and consensus estimates of $3.7 billion.

FDA Panel Endorses Donanemab

Eli Lilly’s experimental Alzheimer’s drug, donanemab, moved closer to U.S. regulatory approval on Monday. An advisory committee of 11 independent experts convened by the U.S. Food and Drug Administration (FDA) voted unanimously that the benefits of donanemab outweigh its risks. The panel concluded that the drug is an “effective” treatment for Alzheimer’s, although they noted that more data is needed to understand its effects on patients with low or no levels of tau, a protein linked to Alzheimer’s, as these patients were excluded from the clinical trial.

Costantino Iadecola, a committee member and professor at Cornell University, emphasized, “If there are some subgroups where further analysis is required, this should not hold up making this drug available to the public.” Nilufer Ertekin-Taner, a neurogeneticist at the Mayo Foundation, also highlighted the need for more data for certain groups, including African Americans, Latin Americans, and people with Down’s syndrome.

The FDA had called for the review in March, delaying the approval of the treatment due to concerns about the drug’s safety, particularly its potential to cause brain swelling. Despite these concerns, the panel’s recommendation is a significant boost for Eli Lilly, whose shares closed up 1.8% on Monday. Mark Mintun, the company’s vice-president of neuroscience research and development, expressed satisfaction, stating, “We are pleased with the committee’s unanimous recognition of donanemab’s positive benefit-risk profile.”

Comparison with Leqembi

Donanemab is part of a new class of treatments aimed at slowing cognitive decline in early-stage Alzheimer’s patients by removing amyloid plaque linked to the disease. Analysts have long expected donanemab to outcompete Leqembi, the only existing Alzheimer’s treatment co-developed by Eisai and Biogen, due to its higher efficacy in clinical trials and the convenience of monthly rather than fortnightly infusions.

Leqembi slowed cognitive decline by 27% compared to the placebo group in a phase 3 trial, while donanemab slowed cognitive decline by 35%. However, donanemab has a higher incidence of a rare brain-swelling side effect, which has led to three deaths during trials. Eli Lilly developed its own cognition test to measure the trial’s success.

In a briefing document published before Monday’s meeting, FDA staffers suggested that donanemab might require a black-box warning to inform patients about its potential side effects. They also questioned whether a threshold of tau levels should be used to determine which patients are offered the treatment.

Market Projections and Safety Concerns

Despite the positive vote, there are concerns about donanemab’s market potential. Leerink analysts recently cut their 2030 sales projections for the drug to $500 million, suggesting it may fall short of the “blockbuster” status of $1 billion in annual sales and well below analysts’ consensus estimates of $3.7 billion for 2030. Eli Lilly was reportedly caught off guard by the FDA’s decision to ask outside experts to review its Alzheimer’s treatment.

Leqembi also underwent scrutiny by an advisory committee before its approval. The controversy surrounding the accelerated approval of Aduhelm, the first Alzheimer’s treatment co-developed by Eisai and Biogen, led to three resignations from the FDA advisory panel and criticism from two congressional committees. In January, Biogen relinquished the rights to Aduhelm.

Street Views

• Costantino Iadecola, Cornell University (Cautiously Optimistic on donanemab):

  "If there are some subgroups where further analysis is required, this should not hold up making this drug available to the public."

• Nilufer Ertekin-Taner, Mayo Foundation (Neutral on donanemab):

  "More data was required for certain groups, including African Americans, Latin Americans and people with Down’s syndrome."

Management Quotes

• Mark Mintun, Vice-President of Neuroscience Research and Development at Eli Lilly:

  "[We are] pleased with the committee’s unanimous recognition of donanemab’s positive benefit-risk profile."