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Lilly Gets FDA Breakthrough Status for Alzheimer's Drug

Eli Lilly received FDA breakthrough status for its donanemab Alzheimer's drug, speeding the agency's review of the product. The shares are higher.

Eli Lilly  (LLY) - Get Eli Lilly and Company (LLY) Report shares rose Thursday after the FDA granted breakthrough status to its donanemab treatment for Alzheimer’s disease.

That speeds the Food and Drug Administration’s consideration of the drug for marketing clearance.

“The breakthrough therapy designation aims to expedite the development and review of drugs that are intended to treat a serious condition when preliminary clinical evidence indicates that the drug may demonstrate substantial improvement on a clinically significant endpoint(s) over already available therapies that have received full FDA approval,” Lilly said.

The Indianapolis health-care giant's stock recently traded at $232, up 6.9%. It has advanced 31% over the past six months.

Lilly said that later this year it intended to submit a biologics-license application for donanemab under the accelerated approval process.

Cowen analysts led by Steve Scala on Thursday affirmed an outperform rating on Lilly and lifted their price target on the stock to $250 from $235.

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Lilly in April posted weaker-than-expected first-quarter earnings and lowered its full-year profit guidance, as elevated research and development costs hit its bottom line.

Adjusted profit totaled $1.87 a share, shy of the Wall Street consensus forecast of $2.14. Revenue was $6.81 billion, missing analysts' forecast of $7.03 billion.

The FDA’s move on donanemab comes 17 days after its controversial decision to approve Biogen’s  (BIIB) - Get Biogen Inc. Report Aduhelm to treat Alzheimer’s. That drug, too, had breakthrough status.

Another Biogen/Eisai ESALY Alzheimer’s drug, lecanemab, on Wednesday garnered FDA breakthrough status.

Analysts had upgraded Biogen after the FDA decision on Aduhelm, even though three members of an FDA advisory committee that assessed the drug resigned from the panel, questioning whether the drug works.

Bernstein analyst Ronny Gal lifted his rating to outperform from market perform. His price target was $500.