Eli Lilly's Alzheimer's Drug Is Just Version 1.0. But It's Still On Track For Blockbuster Status, Analyst Says.

Lilly's donanemab could become a blockbuster in its second year on the market, according to one analyst.

Eli Lilly's Alzheimer's Drug Is Just Version 1.0. But It's Still On Track For Blockbuster Status, Analyst Says.

An analyst stated Monday that Eli Lilly's (LLY), experimental Alzheimer's therapy could become a blockbuster by 2025. Eli Lilly's stock is trading near record highs.

Donanemab is being tested by the company as a possible rival to Leqembi, a drug already approved by Biogen (BIIB), and Eisai (ESAIY). Both drugs target beta amyloid, a protein that accumulates in the brains and spinal cords of Alzheimer patients. The companies claim that removing this protein can slow the cognitive decline caused by the disease.

David Risinger, an analyst at SVB Securities, expects donanemab will be approved and sell $465 million by 2024. He expects sales of Alzheimer's treatments to reach $1.4 billion in 2025, and $3.2 million in 2030. Donanemab can be administered via intravenous injection. Lilly also works on an oral treatment and a subcutaneous injection -- an under-the-skin injection.

In a client note, he stated that he was "bullish" on Lilly's potential to continue innovating in Alzheimer's disease and possibly acquire new mechanisms in order to expand its portfolio.

Eli Lilly's stock fell a small amount in today's midday stock market trading. It was near 431.60. According to MarketSmith.com, Lilly shares have now moved above the buy zone from a cup's base. The buy point is at 375.35. Investors will now be looking for a profit zone between 450.42 and 469.19.

Eli Lilly Stock: Biogen sets up Rivalry

Biogen leads the way in Alzheimer's treatments. Lilly isn’t far behind.

Leqembi received accelerated approval from the Food and Drug Administration in January. Biogen and Eisai have been working towards a more traditional approval, which could lead to reimbursement from the Centers for Medicare & Medicaid Services. Leqembi is doomed without reimbursement.

Analysts expect Medicare officials will approve reimbursement for Leqembi, and other antiamyloid beta Alzheimer’s treatments.

Risinger stated that there are a lot of squabbles between Leqembi and donanemab.

Both require intravenous injections. Leqembi, however, is administered twice monthly whereas donanemab only requires a monthly infusion. Both cause swelling of the brain, also known as amyloid related imaging abnormalities (ARIA). The ARIA rate is roughly twice as high in donanemab patients.

Lilly concentrated on patients who had intermediate or high levels of tau, another Alzheimer's protein. Patients with intermediate levels of tau showed a 36% less rapid cognitive decline, according to a scale known as the Clinical Dementia Rating - Sum of Boxes (CDR-SB). The Alzheimer's treatment slowed the decline of all patients by 29% compared to the placebo.

Leqembi caused a 27% slowdown in decline over the course of 18 months. Biogen did not separate patients according to tau levels.

Risinger, SVB's Risinger, said that the assessment of donanemab's burden will be a separate process from what is required for Leqembi.

Next-Generation Alzheimer's Disease Treatments

Risinger points out that Lilly's Alzheimer's program is still in version 1.0.

The company is developing a new generation of injectable donanemab. This drug leads to a faster clearance of beta-amyloid. He anticipates Lilly will begin testing the Phase 3 of this drug, dubbed "remternetug", "soon". It could then file for approval during the first half 2026. The drug would be launched in 2027.

Biogen and Eisai also work on an injection under the skin of Leqembi.

Lilly is also working on a treatment that can be taken orally for Alzheimer's. A Phase 2 trial is expected to be completed in May 2024.

Risinger stated, "We are looking forward to future results (intravenous and subcutaneous)." We will ultimately be interested to see if remternetug is more effective than donanemab in preventing cognitive decline. However, we must also monitor the relative ARIA risks since it seems to clear plaques faster.

Eli Lilly is rated as outperform by Mr. Hess.