Lilly Said Its Alzheimer’s Data Were Positive. The Stock Market Says Otherwise.

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As shares of

Eli Lilly

plummeted amid disappointment over trial data from the company’s Alzhiemer’s disease drug donanemab, the company argued in a late-morning analyst call that the new data was positive.

“I’m focused on the long-term future for Alzheimer’s patients,”
Dr. Daniel Skovronsky,
Eli Lilly’s (ticker: LLY) chief medical officer, said on a call that began at 10:30 a.m. Eastern time. “If you look at the data set … you see a package of results that are highly compelling that this will indeed become a medicine.”

Lilly management had set high expectations for the new donanemab data released over the weekend, which elaborated on topline results first shared in January from a trial called Trailblazer-ALZ. But in notes published over the weekend and early Monday, analysts said the new details were well short of expectations.

In particular, analysts said that results were weaker than expected on a measure of Alzheimer’s severity known as CDR-SB, a secondary endpoint in the study.

Lilly shares were trading at $188.88 by midday Monday, down 9% from Friday’s close of $208.08.

“The Phase II results give us confidence that donanemab has the potential to become a very important medicine for Alzheimer’s disease,” Skovronsky said. “We’re also excited about the contribution these results make to the Alzheimer’s field. We’ve advanced the field in several ways here.”

On the investor call, Lilly announced changes to a second, ongoing trial of donanemab, known as Trailblazer-ALZ 2. Lilly is redesignating it as a Phase 3 study, whereas it was formerly a Phase 2 study, and significantly increasing the number of patients they plan to recruit.

The company also said that it would switch the primary efficacy measure used in the study from CDR-SB, a more-established metric, to another measure of Alzheimer’s severity, known as iADRS. The completed study used iADRS as its primary endpoint and found a statistically significant improvement using that measure, while the improvement as measured by CDR-SB was not statistically significant.

Primary efficacy data from Trailblazer-ALZ 2 is expected during the first half of 2023.

A key question around donanemab has been when the company plans to file for U.S. Food and Drug Administration approval for the drug. Lilly executives said during the call that they intend to complete Trailblazer-ALZ 2 regardless of what happens. But they left open the possibility that it may be possible to file with the FDA before that trial is done.

“We clearly recognize the depth of unmet medical needs in Alzheimer’s disease and the urgency to bring new therapies to patients,” Skovronsky said. “We’re committed to working with the FDA and global regulators to find a path that addresses urgency on behalf of patients and allows for replication.”

Skovronsky said the company’s “base case” is that data from both trials will be needed for approval. “However, we also recognize that regulatory expectations could shift, and we’ll watch actions from the FDA and other regulators closely and adjust our plans accordingly,” he said.

He also said that there could be “be new pathways for accelerated approval at various time points” before full results from Trailblazer-ALZ 2 are available, but did not elaborate.

The FDA is currently considering whether to approve 

Biogen’s

(BIIB) Alzheimer’s disease drug, aducanumab, on the basis of a single positive trial. Asked whether the company’s timeline would change if aducanumab were to be approved, Skovronsky said the company would “wait and see what happens.”

He said that, regardless of the outcome of the aducanumab submission, Lilly would continue to run Trailblazer-ALZ 2.

“I think the field will welcome a drug that has clear data,” he said. “And that’s the situation that we’re anticipating and planning for with…