Eli Lilly's new Alzheimer's treatment could 'lift' drug market

Eli Lilly (LLY) is one step closer to getting its new Alzheimer's treatment approved by the Food and Drug Administration (FDA) after a panel voted to recommend its use. BMO Capital Markets Managing Director Evan Seigerman joins Market Domination to discuss how the drug will fit into the drug market.

Seigerman explains, "Investors have been hoping that the addition of another product, Lilly's donanemab, could kind of help lift the entire market because having two products and basically three companies marketing the class should accelerate uptake." He expects approval to be near-term but notes that the challenges of getting a diagnosis and the infrastructure involved could make it difficult for patients to access treatment.

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This post was written and updated by Melanie Riehl

Video transcript

Well, Eli Lilly one step closer to getting its new Alzheimer's treatment approved by the Food and Drug Administration.

Joining us now, Evan Seeger and the Mo Capital Markets Managing Director of Bio for Equity Research.

Thanks for being here.

Thanks for having me.

So get the company getting a big boost with the FDA panel saying, ok, this, we're not going to do a black box and this seems to be a good alternative talk to us about how it's going to fit into the marketplace for sure.

So right now, the only approved anti A beta body is by Janice size Lambi.

The sales haven't been great.

It's been kind of an anemic launch.

So investors have been hoping that the addition of another product, Lily's danno could kind of help lift the entire market because having two products and basically three companies marketing the class should accelerate uptake.

So that should be helpful.

You know, I expect that we could see, you know, approval near term, the outcome was pretty successful.

So hopefully, Lily will be off to the races soon and Evan I'm just curious, I mean, obviously, you, you I'm sure a lot of these results and results like this.

I mean, how big a breakthrough was this?

So these are these drugs are incremental, right?

They slow the cognition and function declines that we see when it comes to Alzheimer's disease, you get about six months of kind of a benefit which frankly, if your parent had it, that would be a really good thing.

I think the issue is kind of getting these drugs to the patients.

It's infusions that are, you know, twice a month.

For example, it's at the ho it's delivered at the hospital, you know, it's an infusion clinic.

So it is, there's a lot of infrastructure.

Um but hey, it's something that actually affects the disease.

So I think that's what's big here is, is this sort of difficulty or, you know, the friction if you will of getting these treatments is that one of the reasons that Biogen ei hasn't had more uptake.

There's a lot of reasons I think a few, first of all, getting the diagnosis is challenging before these drugs were available.

You know, physicians had no incentive to diagnose someone with bio cognitive impairment caused by Alzheimer's disease.

They were just kind of worried them.

So now they have to change that paradigm, get the diagnosis, get the pet scans and then get patients into the infusion chairs.

And they also have to make sure what that they even have the amyloids.

They have to make sure they're amyloid positive that they're even eligible to take these particular kinds of and then MRI S to make sure they're not getting brains filling, which was the discussion during the outcome.

So it's a lot of infrastructure um to get these patients the drug when you, and when you try to look at this, the mark of these treatments for Alzheimer's and you try to model it, like, how big is it now?

How big do you think it could be right now?

It's, you know, like barely anything in pages PNL.

I think over time between these two products, it could be 1015 $20 billion.

But that's gonna take a lot of time to get there.

You say a lot of time.

What, what would you, I mean, like five plus years just given how slow the B and E I launch has been hopefully now that Biden's putting their reps in the field that should help and with Lily's reps in the field that should help even further.

You know, I'm really curious because we haven't talked about this in a while because all of discussion around Pharma has just been swallowed up by the G LP one discussion.

And I'm wondering resourcing, what does that look like?

What is R and D funding look like in the industry now?

Is a lot of it going towards that shiny new object?

Are we still see seeing funding for Alzheimer's and cancer and all of these other important things to treat?

So it's really interesting because we just had the big cancer in Chicago and Lily had an investor event that was focused solely on cancer and they have a lot going on.

So they are working in things beside Manja Zon, which is important.

Um There is a lot of focus in obesity, but BioPharma is definitely not shying away from oncology, um inflammation, neuroscience, you know, we saw two takeouts um recently by Bristol with Karuna, um Abby with Seal in the psychiatric space.

So there is opportunity elsewhere outside of metabolic disease and, and finally, one, you, you just look at the stock and it's just a monster.

It's already about, you know, what, 50 percent this year you have an out perform though.

So, so what are the next catalysts?

Um ey, you know, for viewers listening, what do they, what do they have marked on their calendar?

Why do we Yeah, why do we keep liking the stock?

Well, first of all, I look forward to second quarter earnings in early August where we'll get updates on their um you know, on the launch of Z bound, especially when it comes to supply everyone's favorite topic, supply of G LP ones.

Um Beyond that, hopefully, we'll get an update to their label to include the OS A data.

Remember they had sleep apnea.

Um And then further on, we're looking for updates from their oral product or for Glip Ron.

Um You know, that's also been in focus recently.

So they have more in the metabolic space and maybe an approval of the NAB outside of, you know, ZEP Bound Monro.

Right.

Yes, there's other stuff going on.

There's other stuff going on.

They'd be very happy that I'm reminding folks about that.

Yeah, Evan, thanks so much for coming in to talk to us about this.

Appreciate it.

Thank you.

Thank you.