Eli Lilly's experimental Alzheimer's treatment could reach blockbuster status by 2025, an analyst said Monday. Eli Lilly stock continues to trade near a record high.
The company is testing donanemab, a potential rival to Biogen and Eisai's already approved drug, Leqembi. Both drugs remove a protein called beta amyloid that builds up in the brains of Alzheimer's patients. Removing that protein slows the cognitive decline associated with the disease, the companies say.
SVB Securities analyst David Risinger expects donanemab to gain approval and win $465 million in sales in 2024. In 2025 and 2030, he expects a respective $1.4 billion and $3.2 billion in sales of the Alzheimer's treatment. Donanemab is given via intravenous infusion. But Lilly is also working on a subcutaneous shot — an injection under the skin — and an oral treatment.
"We are bullish on Lilly's ability to continue to innovate in Alzheimer's and potentially acquire new mechanisms to build upon its portfolio," he said in a note to clients.
On the stock market today, Eli Lilly stock closed roughly flat at 434.51. Lilly shares are now trading well above a buy zone out of a cup base with a buy point at 375.35, according to MarketSmith.com. Investors are now watching for a profit-taking zone that runs from 450.42 to 469.19.
Eli Lilly Stock: Biogen Sets Up Rivalry
Biogen is leading the charge in Alzheimer's treatment. But Lilly isn't far behind.
Leqembi gained Food and Drug Administration accelerated approval in January. Biogen and Eisai are working toward a traditional approval that could lend itself to reimbursement by the Centers for Medicare and Medicaid Services. Without reimbursement, Leqembi will be dead in the water.
Analysts largely expect Medicare officials to sign off on reimbursement for Leqembi and other anti-amyloid beta Alzheimer's treatments.
There are puts and takes across the board between donanemab and Leqembi, Risinger said.
Both require intravenous infusions. But Leqembi is given twice a month, whereas donanemab is a once-a-month infusion. Both lead to swelling in the brain known as amyloid-related imaging abnormalities, or ARIA. But the ARIA rates are roughly double in donanemab recipients.
Lilly focused on patients with intermediate and high levels of another Alzheimer's-tied protein known as tau. Promisingly for Eli Lilly stock, patients with an intermediate level of tau had a 36% slower cognitive decline on a scale called the Clinical Dementia Rating-Sum of Boxes, or CDR-SB. Across all patients, the Alzheimer's treatment led to a 29% slower decline than the placebo.
Leqembi led to a 27% slower decline over 18 months, but Biogen didn't separate patients based on tau levels.
"Tau burden assessment will be an extra process for donanemab beyond what is required to Leqembi," SVB's Risinger said.
Next-Generation Alzheimer's Treatments
But Risinger notes Lilly is only on version 1.0 of its Alzheimer's treatment programs.
The company is working on a next-generation injected version of donanemab. That drugs leads to a more rapid clearance of beta amyloid. He expects Lilly to begin Phase 3 testing of that drug — dubbed remternetug — "soon" and potentially file for approval in the first half of 2026. That would put the drug's launch in 2027.
It's important to note, Biogen and Eisai are also working on an under-the-skin injection of Leqembi.
Lilly also is working on an oral treatment for Alzheimer's disease. A Phase 2 study is due to wrap in May 2024.
"We look forward to future (intravenous) and subcutaneous results," Risinger said. "Ultimately, we will be interested in whether remternetug delivers better (effectiveness) than donanemab on cognitive decline, but we also need to watch relative ARIA risk since it appears to clear plaques more rapidly."
He has an outperform rating on Eli Lilly stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
