Eli Lilly & Co. reported earnings below expectations and sharply lowered the top end of a sales forecast for COVID-19 antibodies. But its shares rose the most in over a month after executives expressed strong optimism about the prospects for its experimental Alzheimer’s drug.
On a conference call Tuesday, executives confirmed Lilly’s plan, first announced in June, to apply for accelerated U.S. approval for donanemab by the end of 2021. Enrollment is near completion for a final-stage trial that will provide crucial additional safety data, they said.
“I am even more confident now than I was then that we should have an adequate package to support a complete submission by the end of this year,” chief scientific officer Daniel Skovronsky said on the call. “That includes of course our confidence that we have enough safety data.”
Adjusted second-quarter profit of $1.87 a share missed analysts’ estimates by 2 cents, and Indianapolis-based Lilly reduced the high end of its forecast for 2021 sales of COVID therapies to $1.1 billion from $1.5 billion.
But analysts peppered Skovronsky with questions as to the prospects for the drug that could become the second in a new class of Alzheimer’s therapies after Biogen Inc.’s Aduhelm was approved in June. Queries ranged from how the federal Medicare program might cover such treatments to which biomarkers might be used to predict patients’ response.
The shares rose as much as 5.1% as of noon in New York, the most intraday since June 24. They had gained 46% this year through Monday’s close, mainly due to the anticipated Alzheimer’s drug.
Skovronsky said Aduhelm’s approval represented a shift in policy for the Food and Drug Administration, paving the way for Lilly to apply for approval of its drug sooner than expected. Biogen’s drug was approved because it lowers brain levels of an abnormal protein called amyloid, although studies of its impact on cognitive decline produced contradictory results.
Lilly hopes donanemab can also gain accelerated approval on the basis of its ability to remove amyloid, Skovronsky said. By 2023, though, it hopes the giant final-stage trial will confirm that the drug slows cognitive decline.
Biogen priced Aduhelm at $56,000 per year, far higher than expected, and analysts were curious about how Lilly might approach the issue. Skovronsky said it was too early to talk about donanemab’s price.
Skovronsky got a shout-out from the CEO at the end of the call. “Thanks to Dan for answering all those questions,” Chief Executive Officer David Ricks said.
Subscribe to Fortune Daily to get essential business stories straight to your inbox each morning.
