Eli Lilly Alzheimer's drug setback extends rival Biogen's lead

Jan 20 (Reuters) - The U.S. health regulator's rejection of accelerated approval for Eli Lilly and Co's Alzheimer's disease drug extends the market lead for rivals Eisai and Biogen's treatment by months, analysts said.

The U.S. Food and Drug Administration (FDA) declined to approve donanemab's application because Lilly had not submitted data from enough patients who were treated for at least a year, the drugmaker said late Thursday.

"This is a modest positive for Biogen" because it delays donanemab's launch, Jefferies analyst Michael Yee said, adding that Eli Lilly could file for traditional approval by mid-2023.

Lilly's shares fell 1.3% to $346.6, while Biogen Inc's (BIIB.O) shares rose 1.5% to $284.5 in morning trade on Friday.

"Lilly's inability to launch donanemab near-term will prevent them from expediting their launch post-full approval by depriving them of the ability to begin to educate physicians and patients," said Citi analyst Andrew Baum.

The setback for Lilly comes just weeks after the FDA granted Japanese drugmaker Eisai Co Ltd (4523.T) and partner Biogen accelerated approval for their Alzheimer's drug Leqembi. read more

Analysts are waiting for the traditional approval of Biogen's drug, expected in the next few months, and for wider health insurance coverage before they expect sales of the drug to pick up.

The U.S. government's Medicare health plan currently reimburses Alzheimer's disease drugs with accelerated approval only if patients are enrolled in a validated clinical study.

Lilly expects to report data from a late-stage trial of donanemab in the second quarter, which would form the basis of the drug's application seeking traditional FDA approval shortly thereafter.

"But if there is anything wrong with the (Eli Lilly) data set, it is easier to reject an unapproved drug than remove an approved drug from market," said Baird analyst Brian Skorney.

Reporting by Khushi Mandowara in Bengaluru; Editing by Shailesh Kuber

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