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Lilly Cleared by FDA to Market Alzheimer's Detection Drug

Lilly's new Alzheimer's detection drug, cleared by the FDA for marketing, is a major improvement over the current protocol, a media report says.

Eli Lilly  (LLY) - Get Report said the U.S. Food and Drug Administration cleared the giant drug maker to market Tauvid to detect tau, an important characteristic of Alzheimer’s disease.

Tauvid represents a major improvement over the current detection protocol - examining the brains of people who died from the disease, Reuters reports. The drug is used to diagnose, not to treat, Alzheimer’s.

Tau creates neurofibrillary tangles within neurons in the brains of people who have Alzheimer’s disease.

Patients take Tauvid intravenously. The drug then binds to certain sites in the brain where tau grows, Reuters reports. A PET scan can then be performed to find the tangles, according to Reuters.

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"This is the first drug approved for imaging tau pathology, one of the two neuropathological hallmarks of Alzheimer's disease, and represents a major advance for patients with cognitive impairment being evaluated for the condition," Charles Ganley, a specialty medicine director at the FDA, said in a statement.

Morningstar analyst Damien Conover offers a mixed take on the Indianapolis health-care giant.

“We continue to view Lilly as well positioned for growth with limited near-term patent losses and a solid late-stage pipeline, strengthening the firm’s wide moat,” he wrote in a commentary April 23.

“However, we believe these favorable characteristics are factored into the stock price, which currently looks modestly overvalued.” 

The stock then traded at $160, and Conover pegged fair value at $130.

At last check Lilly shares traded at $151.07, up 0.3% Friday. The stock climbed 19% during the three months through Thursday, compared with a 3% gain for the S&P 500.