Shaky Prospects For Eli Lilly's Donanemab For Alzheimer's Disease
Summary
- At this point, Eli Lilly's donanemab performs only a tick better than Biogen's aducanumab/Aduhelm for Alzheimer's disease.
- The FDA may grant accelerated approval to donanemab as it did for aducanumab based on the removal of amyloid plaques as a surrogate biomarker.
- Medicare, though, will probably deny general coverage to donanemab as it did for Aduhelm based on insufficient clinical evidence.
- Investors should consider selling some shares of Eli Lilly given this likely outcome.
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The chances that the FDA will grant accelerated approval to Eli Lilly’s (NYSE:LLY) donanemab for Alzheimer’s disease are fairly good (accelerated approval allows a drug to be sold based on surrogate biomarker data while further studies are conducted to determine its actual efficacy). But Medicare likely will not provide coverage for the drug outside of a confirmatory clinical trial. The reason for this is that donanemab like Biogen’s (BIIB) aducanumab (now Aduhelm) robustly removes amyloid plaques, but does not appear to slow down Alzheimer’s disease in a clinically significant manner in most patients. At best, then, the FDA may grant accelerated approval to donanemab just like it did for aducanumab based on its removal of plaques as a surrogate biomarker, but Medicare will probably deny general coverage just like it did for aducanumab based on insufficient evidence of its clinical efficacy. My overall recommendation to investors regarding any company whose primary target is amyloid is not to invest in that company, because amyloid is almost certainly not central to the pathogenesis of Alzheimer’s disease.
The main anti-amyloid contenders operate somewhat differently: aducanumab preferentially targets amyloid plaques (but can remove amyloid oligomers), Biogen and Eisai’s (OTCPK:ESALY) lecanemab (formerly BAN2401) preferentially targets amyloid oligomers (but can remove amyloid plaques), donanemab targets a form of amyloid plaques – pyroglutmate-modified amyloid that can increase amounts of amyloid oligomers, and Alzheon’s ALZ-801 (once known as tramiprosate) inhibits amyloid oligomer formation. However, the results up to this point are almost exactly the same: removing or inhibiting the formation of amyloid oligomers or plaques has almost no effect on non-APOE4 carriers and very modestly slows down the progression of the disease in APOE4 carriers (aducanumab, p. 59, BAN2401, tramiprosate). The problem is that all the anti-amyloid drugs mentioned above except ALZ-801 can also increase brain swelling and brain bleeds in APOE4 carriers. Eli Lilly has not provided a breakdown of the effects of its anti-amyloid drug based on APOE4 status yet but its overall numbers are quite similar to aducanumab.
The following numbers are from Eli Lilly’s 76 week phase 2 clinical trial for donanemab and Biogen’s second of two phase 3 clinical trials (at 78 weeks) for aducanumab. Each produced slower rates of cognitive decline but in a way that were not minimally clinically significant in most patients (even though they met their primary endpoints).
Donanemab versus Aducanumab (approximate from charts for donanemab)
CDR-SB score: .4 versus .39
Adas-Cog-13 score: 1.8 versus 1.4
MMSE: .7 versus .6
(donanemab charts, aducanumab numbers, p. 9)
Donanemab also performed slightly better in regards to activities of daily living than aducanumab although the tests used were not exactly the same. The donanemab numbers again are from a phase 2 clinical trial, but there are no reasons why the phase 3 trial numbers should be significantly different.
In the larger picture, it does not matter much what type of amyloid is targeted, how early it is targeted, or how much of it is removed. Often times, people have a considerable amount of amyloid in their brains and don’t have Alzheimer’s disease (study). The removal of amyloid from APOE4 carriers does slightly slow down the progression of the disease because they have more amyloid to begin with. They also have more oxidative stress than non-carriers. In both groups this stress is caused initially by other factors, with levels of amyloid being only sufficiently high in carriers to play some role in their disease progression (anti-amyloid drugs slow down the rate of progression in carriers closer to the rate of non-carriers early in the disease). To summarize: removing amyloid only removes one factor causing oxidative stress and then a secondary one at that, and that removal only makes a slight difference in the rate of cognitive decline in APOE4 carriers.
Politically, the question is what will the FDA and Medicare do with Eli Lilly’s data. The current FDA commissioner Robert Califf has already subtly expressed some misgivings as to how aducanumab’s approval was handled (comment one, comment two). The unanswerable question is would the FDA look at Eli Lilly’s results and say it is a bit better than Biogen’s so the drug should be granted accelerated approval just like aducanumab was or would the FDA this time not approve the drug based on a surrogate biomarker (amyloid) that has little to do with cognition (aducanumab results, p. 66). Considering that no amyloid drug to date has produced any significant benefit in non-APOE4 carriers, the logical decision would be to reject the drug for this group. Given the potentially serious side effects of amyloid removal drugs on carriers, the minimal benefit of these drugs is not likely worth the risks and therefore should not be approved for this group as well. For ALZ-801 which does not appear to have any safety issues, the decision might tip a small bit in favor of approval for carriers, but only if more effective drugs are not developed in the meantime.
For Medicare the decision seems much more clear-cut. Eli Lilly’s donanemab since it appears to perform very similar to Biogen’s aducanumab/Aduhelm would be subjected to the same strict coverage requirements (i.e. the cost of the drug would only be covered for those patients in clinical trials).
Alzheimer’s advocacy groups and scientists backing the amyloid hypothesis for Alzheimer’s disease spent a great deal of effort and capital trying to reverse Medicare’s decision but they did so not to the benefit but to the detriment of Alzheimer’s caregivers and patients. Medicare based their decision on the actual results and not on a surrogate marker of very questionable value. Slowing down the progress of anti-amyloid treatments for Alzheimer’s disease is not the same thing as slowing down the progress on effective treatments for Alzheimer’s disease. The former has been stunted by Medicare administrators; the latter was not.
For investors, the tale of Biogen and Eli Lilly stock value has been closely (but not entirely) connected to speculation regarding their anti-amyloid drugs. For Biogen that meant around a 200 point increase in its stock value (on two different occasions) which it has now given up and then a bit more. For Eli Lilly with expectations a bit more tempered based on the Biogen’s experience, the increase has been over 100 points. But in the end, I expect Eli Lilly to give up most of these gains. The fortunes of both companies will depend on the success of their non-Alzheimer’s drug pipelines which in most cases is difficult to predict at this time. For the time-being, it is probably a good idea to begin selling some Eli Lilly stock.
This article was written by
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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Comments (31)
I totally do not agree with this statement. Here are my reasons for disagreeing with this. LLY is not just an Alzheimers product Company. 1) Revenue attributable to newer medicines grew over 24% and now represents nearly 61% of the core business this quarter
2) Completed another $750 million in share repurchases Q4 2021. Completed $1.5 billion in share repurchases in Q1 2022
3) Gross margin as a percent of revenue increased 70 basis points to 76.1% in Q1 2022
4) Jardiance is now the first and only heart failure therapy to demonstrate statistically significant risk reduction in cardiovascular death or hospitalization for heart failure regardless of ejection fraction.
5) the Phase III trial study in Jardiance for chronic kidney disease was stopped early due to clear positive efficacy
6) Regulatory submissions for Tirzepatide for type 2 diabetes in the U.S. to which LLY applied a priority review voucher, as well as the EU,
U.S. launch in Diabetes expected fall of 2022.
7) 14% weight loss in Diabetics and the benefit of that being even higher in the non-diabetic obesity population. Obviously, just a massive unmet need 110 million Americans live with obesity. Only about 3% of them are treated with some type of anti-obesity medication.
SURMOUNT-1 report on Tirzepatide in Obesity 2022. - reduction in Non-Diabetics. (greater than found in the diabetics ) up to 22.5% weight loss at 72 weeks (depending on dosage ) SURMOUNT-1 showed up to 60% of patients achieved at least 20% body weight reduction at 72 weeks, No other product comes anywhere close to this. The overall treatment discontinuation rates range from roughly 14% to 16% in the tirzepatide arms compared to over 26% for placebo. SURMOUNT - 3 and 4 are ongoing studies .
8) LLY stands on 2 solid pillars and 2 additional pillars to appear in 2022.
Trulicity and Verzenio currently and Tirzepatide and Alzheimers product for the near future.
Trulicity is taken once weekly and growing very fast. (definition on pillar – greater than $5.0 Billion a year )
9) Verzenio for Breast Cancer ( B.C.) proved successful in the Adjuvant setting where as the established product from the same class Ibrance of Pfizer reported a negative study. This ( adjuvant setting ) is a huge piece of the B.C. pie.
10) Tirzepatide is an outstanding product for Diabetes. the most potent to reduce blood sugar and reduce weight.
www.evaluate.com/...11) As for the Alzheimers product we now have MRI and PET scan evidence that it significantly reduces the Plaques and Tangles in the brain. The TRAILBLAZER-2 is a major Phase 2 study. US government will pay for patients in an Alzheimers study if their meds. are normally covered by Medicare. This study will report spring of 2023. FDA approval expected Mid. 2023.
12) Mirikizumab ( Il-23) (for ulcerative colitis as the first indication approval ) submitted to FDA for approval
13) lebrikizumab (AD ) ( Il- 13 ) has shown positive data ( Phase 3 ) in the Immunology area. Launch expected in 2023. In 2026 they will bring in $5 Billion together ( Mirki + Lebri ) . Just as a reminder LLY already has a foot in the market place on Immunological products Taltz and Olmiant
14) The initiation of a rolling submission in the U.S. for pertibrutinib in mantle cell lymphoma
15) LLY began dosing patients in the first of five Phase III trials for investigational weekly insulin basal insulin FC or BIF. The trial compares weekly BIF to insulin degludec where patients are currently treated with basal insulin
16) 15% increase to the dividend for the fourth consecutive year was announced end 2021.
