Eli Lilly (NYSE:LLY) stock gained about 2% in yesterday’s regular trading session. The upside comes after the U.S. Food and Drug Administration (FDA) unanimously recommended the company’s Alzheimer’s drug, donanemab, for approval. They believe that LLY’s drug benefits outweigh its risks, including side effects such as brain swelling and bleeding. This paves the way for the FDA to decide on approval later this year.
The recommendation is based on trial results released in July 2023, involving nearly 1,700 individuals in the early stages of Alzheimer’s disease. Eli Lilly’s donanemab showed a 29% reduction in the progression of the disease in 18 months. This is based on their ability to perform daily tasks like driving, managing finances, and discussing current events.
It is worth mentioning that if LLY is successful in getting the FDA’s approval, then donanemab would be the second Alzheimer’s drug cleared in the U.S. Currently, Eisai, a Japanese pharmaceutical company, and Biogen’s (BIIB) Leqembi are the only treatments available in the market.
Analysts Bullish about Donanemab’s Approval
The drug donanameb was initially expected to receive FDA approval last year. However, concerns about the drug’s safety caused a delay. Nevertheless, its success in slowing the progression of the disease outweighs its safety concerns.
According to the TipRanks Stock Analysis tool, “Bulls Say, Bears Say,” bullish analysts believe that the FDA’s briefing documents support donanemab’s approval for Alzheimer’s disease.
Is LLY Stock a Buy?
Wall Street is optimistic about Eli Lilly. The stock has a Strong Buy consensus rating based on 16 Buys and two Hold rating assigned in the past three months. Following a year-to-date rally of 23%, the analysts’ average price target on LLY stock of $890 implies 2.89% upside potential.
