Lilly shares slip after FDA rejects early Alzheimer's drug approval

By Scott Kanowsky

Investing.com -- Shares in Eli Lilly and Company (NYSE: LLY) dipped in early trading on Friday after the U.S. Food and Drug Administration decided not to give early approval to the drugmaker's experimental Alzheimer's treatment.

In a statement released on Thursday, the FDA said it could not sign off on the drug - known as donanemab - because Lilly had not submitted sufficient trial data from patients who had been exposed to it for at least 12 months.

Many patients with early-stage Alzheimer's were able to stop dosing after only 6 months, Lilly said, because donanemab had effectively removed amyloid protein plaques from their brains. This resulted in fewer than 100 patients receiving 12 months of donanemab, Lilly explained.

The company added that the FDA had sent it a letter that detailed its concerns and explained how Lilly could meet the standards needed for donanemab to be approved. The FDA can give so-called "accelerated" approval to drugs that display proof of having had an impact on patient conditions.

According to Lilly, the decision will not result in a change to the group's 2023 financial guidance.

Analysts at Cantor Fitzgerald said they remained positive on donanemab given that the confirmatory trials of the drug remain ongoing. They acknowledged that many Wall Street analysts had predicted the drug would receive accelerated approval, but described the FDA's rejection as only a "near-term setback."

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