Eli Lilly (LLY -1.00%) and Biogen (BIIB 0.23%) are both keen to compete in the market for Alzheimer's disease therapies. Biogen's prior attempt at an Alzheimer's medicine to hit the market was a train wreck, but its latest drug seems to be avoiding a repeat.
Meanwhile, Eli Lilly has yet to submit its candidate for regulatory review. And while the recently released phase 3 clinical trial data for Lilly's candidate looks promising, it too has a record of swinging and missing.
So is the high likelihood of an Alzheimer's market showdown going to make or break one of these two titans? It isn't likely. In fact, both could flourish -- but one might flourish more than the other. Here's why.
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Eli Lilly's entry is approaching the finish line
On May 3, Eli Lilly issued a press release describing some of the phase 3 clinical trial data from its drug candidate donanemab, which is being investigated for treating early-stage Alzheimer's disease.
Whereas 29% of the patients in the study taking a placebo had no progression of their disease after one year per a commonly used rating scale, 47% of patients being treated with donanemab were reported to experience no progression. And after 18 months, the patients treated with the drug exhibited 40% less decline in their ability to perform daily tasks.
The company expects to publish the full results in a scientific journal at some point, but it'll also present them at the Alzheimer's Association International Conference in July.
Overall, the company's results are promising. But it's important to put them into context. Lilly's attempt to get an accelerated approval for donanemab in January was blocked by regulators at the Food and Drug Administration (FDA). Over the last 20 years, it's worked to try and commercialize another one of its candidates, solanezumab, failing repeatedly in the process. It also has another medicine called remternetug that's in late-stage clinical trials, and a few other early-stage candidates.
So even if donanemab doesn't get approval, which is very possible, Eli Lilly will have a few more stabs at commercializing something for Alzheimer's over the next few years. And after such a long string of unsuccessful attempts, the medicine will need to be a smash hit to recoup its research and development (R&D) costs. Still, any drug would need to be a big earner to make much of a dent, given the company's trailing-12-month sales of $27.7 billion.
Biogen's growth trajectory could be faster
Biogen's biologic for early Alzheimer's disease is called Leqembi, and it's been on the market on a limited basis since early January of this year. Per the results of its phase 3 trial, patients treated with the drug experienced a 27% slowing in their rate of cognitive decline. Right off the bat, it seems that in a head-to-head comparison, Eli Lilly's candidate is more effective for its intended purpose.
But don't jump to conclusions in this case, even if they might seem clear-cut. Leqembi has the benefit of ongoing post-market monitoring and confirmatory trials that track patients to assess the drug's performance, as well as newly published analyses of old data.
That post-market data will be necessary to convince clinicians to prescribe the medicine, and for public insurance schemes like Medicare to cover its cost. Both of those elements were missing with Aduhelm, which was Biogen's prior attempt at commercializing an Alzheimer's therapy. The company is unlikely to repeat the mistakes of the past.
At the same time, Eli Lilly, without the firsthand benefit of Biogen's experience, could easily encounter the same set of problems and navigate them just as poorly. What's ultimately more likely is that with further elucidation about how the different drugs by each developer work, they will both find treatment niches in certain subpopulations of people with Alzheimer's. Though the two drugs probably won't be prescribed to the same person, it's very plausible that they can coexist on the market.
Furthermore, it's important to note that Biogen's 2022 sales were $10.1 billion. That means Leqembi could probably capture a smaller market share than Eli Lilly's candidate, and still increase Biogen's top line by a larger proportion, which could drive its shares to outperform. The fact that its drug appears to be slightly less effective likely won't be a major stumbling block unless further evidence shows that there's a big (and so far, unearthed) disadvantage to using it compared to donanemab.
So there's a solid chance that Biogen's shares will gain more from its Alzheimer's drug even if Eli Lilly hits it out of the park. Either way, these two competitors will probably both perform well -- and Alzheimer's medicines are just one part of their large drug development pipelines.
