Eli Lilly's Donanemab Gains Favorable FDA Advisory Verdict, Boosting Stock Potential, Says BofA Analyst

BofA Securities analyst Geoff Meacham reiterated the Buy rating on Eli Lilly And Company LLY, with a price forecast of $1,000.

An advisory committee to the U.S. Food and Drug Administration (FDA) delivered a favorable verdict on the company’s Alzheimer’s treatment, donanemab, declaring its benefits to surpass the associated risks.

The outcome will support regulatory approval of donanemab in patients with mild cognitive impairment/mild dementia, Meacham writes.

Moreover, regarding tau stratification, the speakers stressed their support for donanemab’s effectiveness across tau subgroups, including the no/very low tau population that was excluded from the placebo-controlled trials given the positive trends on biomarkers, the analyst adds.

Supported by the discussion, the analyst sees donanemab’s label to be similar to Biogen Inc. BIIB and Eisai Co., Ltd. ESAIY Leqembi.

Check This Out: Biogen/Eisai’s Popular Alzheimer’s Drug Leqembi Is Seeing Slow Adoption – Here’s Why

The analyst adds that the speakers stressed the potential challenges of commercial implementation regarding dosing cessation, including how often to test amyloid levels.

While Lilly suggested testing should take place after the first year of treatment, it’s still unclear when prescribers should test amyloid levels again, according to the speakers.

On the flip side, better-than-expected launches of competing products may hurt the company. In addition, potential drug pricing system restructuring in the U.S. may be a potential risk.

However, a “robust” new product cycle and “differentiated growth” versus peers should help the stock, the analyst adds.

Price Action: LLY shares are trading lower by 0.04% to $864.65 at last check Tuesday.

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