Eli Lilly‘s (NYSE: LLY) name has become somewhat synonymous with its work in diabetes and obesity care. That’s understandable. The drugmaker is a leader in these areas, and its most recent medicines, Mounjaro and Zepbound, promise to rack up impressive sales.
That said, there is much more to Eli Lilly than its successful efforts in these areas. The company has been looking to break into another challenging field: Alzheimer’s disease (AD). Eli Lilly recently got some positive regulatory news on that front.
A unanimous vote
Donanemab has faced numerous trials and tribulations on its regulatory path. Eli Lilly initially sought to earn accelerated approval for the medicine before completing phase 3 studies, but the U.S. Food and Drug Administration (FDA) declined to grant that green light. Once the drugmaker completed phase 3 clinical trials, its application was delayed a couple of times, including a few months ago when the FDA decided to convene a panel of experts to discuss whether donanemab should get the nod.
The timing of that decision was curious, to say the least. It might have indicated that there were serious questions regarding donanemab. However, the outside advisors to the FDA that were convened unanimously agreed: The available data shows that donanemab is effective for the patient population studied, and the medicine’s benefits outweigh the risks. In other words, these experts endorsed the approval of the therapy during this meeting, which was held on June 10.
Beyond donanemab
Developing AD medicines has proved extremely difficult. The overwhelming majority of attempts ended in failure. It gets worse; even successfully launched drugs have had a rough go at it. For instance, Aduhelm, which earned accelerated approval from the FDA in 2021, was the first AD medicine to cross that final regulatory hurdle in the U.S. since 2003. However, due to lingering questions surrounding its safety and efficacy, many physicians and healthcare systems chose not to prescribe it.
Could donanemab succeed where so many others failed by earning approval to treat AD and generate steady and growing revenue? The approval part almost seems like a foregone conclusion right now. The FDA doesn’t always follow the advice of the panel of experts it convenes, but it almost always does. How will the medicine perform on the market if approved? Analysts seem hopeful. Some estimated that it could generate $2.1 billion in revenue by 2028.
Several things could complicate matters for Eli Lilly. First, nobody knows how it will price the drug. Second, the FDA could require an MRI before it is prescribed and several times after, just as it does with Leqembi, another recently approved AD treatment. That’s an extra (expensive) step physicians and patients would rather avoid. That said, donanemab could still contribute meaningfully to Eli Lilly’s top line, and it’s not like the company lacks products to drive solid growth.
Zepbound and Mounjaro, which treat obesity and diabetes, respectively, are increasing their sales at an almost dizzying pace. Older products like cancer medicine Verzenio are contributing too. Jaypirca — another cancer treatment — and ulcerative colitis therapy Omvoh were approved just last year, and both seem to have bright futures. Eli Lilly also has exciting pipeline candidates like efsitora alfa, a potential once-weekly insulin product and a next-gen weight loss drug called mazdutide.
Eli Lilly’s prospects hardly depend on donanemab, although it would be a nice addition to its lineup. Regardless, the drugmaker remains one of the top pharmaceutical stocks to buy.
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Eli Lilly Scores Another Major Win and Lines Up Its Next Blockbuster was originally published by The Motley Fool
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