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Can Eli Lilly ETFs Surge on Approval of Alzheimer's Drug?

On Jun 10, the FDA’s Peripheral and Central Nervous System Drugs Advisory Committee (PCNS) voted 11-0, unanimously recommending the approval of Eli Lilly’s LLY Alzheimer's disease drug, donanemab. Eli Lilly gained 2.6% last week and 14.1% past month.

The committee said that data from clinical studies on donanemab demonstrated substantial evidence of efficacy and a clinically meaningful slowdown in disease progression for early symptomatic Alzheimer’s patients. Lilly is seeking approval for donanemab for the treatment of patients with mild Alzheimer’s disease.

What About Competition?

Notably, Biogen BIIB and its Japan-based partner Eisai’s Leqembi was approved last year in the United States to reduce the cognitive decline associated with early Alzheimer’s disease. Their controversial medicine, Aduhelm, was approved by the FDA in 2021.

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However, in January 2024, Biogen discontinued the development and commercialization of Aduhelm as the drug failed to generate any significant sales due to a lack of access to Medicare beneficiaries.

Prothena Corporation PRTA, AC Immune and Cassava Sciences SAVA are also developing therapies for Alzheimer's disease. Prothena is also developing a dual Aβ-tau vaccine, PRX123, a potential prevention and treatment for Alzheimer's disease.

Will Donanemab See Success?

Investors should note that the treatment can cause a brain swelling side effect called amyloid-related imaging abnormalities (ARIA). Most analysts are now expecting donanemab to gain FDA approval with a broad label and a warning for ARIA.

Leqembi’s label also has a similar warning for ARIA. A PDUFA date, however, has not been scheduled by the FDA for a decision on donanemab after the original decision was delayed for the need of the advisory meeting.

Until Leqembi was approved, the drugs available in the market just treated the symptoms of the disease. Several companies have failed to develop safe and effective treatment options to treat this deadly brain disease despite making significant investments.

Business Prospects

According to Market.us, the global Alzheimer's Disease Therapeutics Market size is forecasted to top $30.8 Billion by 2033, with a promising CAGR of 18.8% from 2024 to 2033. North America dominated the global Alzheimer's disease therapeutics market with a significant 42.5% revenue share. Asia-Pacific is currently expected to experience exponential growth.

Lilly-Heavy ETFs in Focus

While investors eyeing to play the approval of Alzheimer's drug can play Lilly stock in specific, the stock may be tapped in the basket approach. Lilly-heavy ETFs include iShares U.S. Pharmaceuticals ETF IHE (with 26.09% weight), Roundhill GLP-1 & Weight Loss ETF (with 20.88% weight), Horizon Kinetics Medical ETF MEDX (with 16.48%) and Amplify Weight Loss Drug & Treatment ETF THNR (weight 16.09%).

 


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Biogen Inc. (BIIB) : Free Stock Analysis Report

Eli Lilly and Company (LLY) : Free Stock Analysis Report

Prothena Corporation plc (PRTA) : Free Stock Analysis Report

iShares U.S. Pharmaceuticals ETF (IHE): ETF Research Reports

Cassava Sciences, Inc. (SAVA) : Free Stock Analysis Report

Horizon Kinetics Medical ETF (MEDX): ETF Research Reports

Amplify Weight Loss Drug & Treatment ETF (THNR): ETF Research Reports

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