Eli Lilly And The Alzheimer’s Dilemma (Rating Upgrade)

Summary:

• The FDA has convened an advisory panel to discuss the safety and efficacy of Eli Lilly’s anti-amyloid antibody drug donanemab.
• Approval of donanemab could have a modestly positive impact on LLY stock, while denial could lead to a substantial (but not disastrous) drop.
• Donanemab appears to have little effect as a whole on non-APOE4 carriers, African Americans, and Hispanics.
• Alzheimer’s disease appears to be primarily driven by the nitro-oxidant peroxynitrite rather than amyloid. Anti-peroxynitrite rather than anti-amyloid treatments are likely to be more successful.

The Food and Drug Administration’s approval of Eli Lilly’s (NYSE:LLY) anti-amyloid antibody drug donanemab was once considered a slam dunk (previous analysis). But now, the FDA is convening an advisory panel to weigh in on the drug. This may just be a blip for Eli Lilly, or alternatively, concerns over donanemab’s safety and efficacy could potentially lead to its rejection. Perhaps, the FDA is having approval remorse after its earlier thumbs up for Biogen (BIIB) and Eisai’s (OTCPK:ESALF) Aduhelm (accelerated) and Leqembi (full).

Eli Lilly’s stock dipped about 40 points upon the news. If donanemab were to receive full FDA approval, it would likely add to the company’s golden run upward, although perhaps most investors still consider a positive outcome likely, so the move upward might be a modest one. On the other hand, the FDA’s denial of donanemab might have a relatively negative effect on the stock, but cushioned by the sales of its wildly popular anti-diabetes and weight loss drug (Mounjaro/Zepbound).

The last few months have not been good ones for anti-amyloid drugs. Biogen and Eisai have pulled the plug on Aduhelm and sales for Leqembi have been slow. And now, perhaps, the FDA is showing some reluctance in approving another drug in the same category that might be slightly riskier in terms of brain swelling and brain bleeding, but slightly more effective than Leqembi (story). In addition, questions arise as to whether the cost and the invasive method of treatment – intravenous administration – justify the risks considering the small benefits.

In a sense, it is not just donanemab, but the whole amyloid theory of Alzheimer’s disease that is now on trial. Aduhelm, Leqembi, and donanemab only seem to have some effect on those with large amounts of amyloid in their brain. These predominantly are APOE4 carriers. Non-carriers do not respond well to these drugs. The FDA statistician noted that this was the case for aducanumab/Aduhelm and Eli Lilly itself indicated the same for donanemab.

Did Only APOE4s Benefit? On the clinical outcome measures CDR-SB, MMSE, ADAS-Cog13, and ADCS-ADL, APOE4 carriers fared better while noncarriers did no better than the placebo group.” (see copyrighted graph in article)

Relationships between amyloid reduction and iADRS [integrated Alzheimer’s Disease Rating Scale] scores were significant in APOE4 carriers, but not in participants without APOE4.” (paywall article)

For African Americans and Hispanics, the story is even more stark. Many African Americans and, to a lesser degree, Hispanics were excluded from Eli Lilly’s trials because they did not have sufficient levels of amyloid to qualify. This caused all sorts of consternation among the proponents of the amyloid hypothesis for Alzheimer’s disease. Some suggested that memory loss in these populations was due to factors other than amyloid such as hypertension, diabetes, or stress and/or that it was another form of dementia since from their point of view, without amyloid it is not Alzheimer’s disease (story). But it is these other factors, not amyloid, that can trigger Alzheimer’s disease in the first place. African Americans tend to be at greater risk for Alzheimer’s disease because they have higher levels of the nitro-oxidant peroxynitrite: ONOO- (study). This usually also results in higher levels of amyloid, but African Americans generally have lower levels of DNA oxidative stress (research finding) and as a consequence, lower levels of amyloid (due to reduced caspase 3 activity – an enzyme which makes the first cut in the amyloid precursor protein). Thus, African Americans (and others under certain circumstances) can have Alzheimer’s disease with little to no amyloid.

Thus, we have whole groups – non-APOE4 carriers, African Americans, and Hispanics who benefit very little if at all from anti-amyloid antibody drugs. For APOE4 carriers who advance more rapidly during the early stages of Alzheimer’s disease, these drugs slow progression closer to the rate of non-carriers, but it is unclear if this benefit is clinically significant.

The chances of FDA approval of donanemab are still good, but far from close to one hundred percent anymore. Eli Lilly’s stock performance has defied my (and others) expectations. Competition and serious adverse side effects from its anti-diabetes and weight loss drugs may still put a dent in its newly created empire, but a major downturn, for the time being at least, does not seem to be in the cards. Therefore, I am changing my previous sell recommendation to a hold recommendation. But for Alzheimer’s disease, the end to anti-amyloid antibody drugs and to the amyloid hypothesis itself is becoming increasing possible to imagine. And with it, the door opens to much safer and more effective treatments.

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