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When did Wall Street sour on Lilly’s Alzheimer’s drug?

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Acadia’s schizophrenia drug fails in pivotal study

Acadia Pharmaceuticals’ treatment for schizophrenia missed its primary goal in a pivotal study, the company said yesterday, pointing to an unexpectedly strong placebo effect.

The drug, pimavanserin, failed to outperform placebo in reducing negative symptoms of schizophrenia, which include social withdrawal and lack of motivation. The drug’s effects on a 16-point rating scale were similar to an earlier, positive study, but the placebo group did significantly better than in the prior trial.

The setback interrupts Acadia’s efforts to expand the use of pimavanserin, which is approved under the brand name Nuplazid to treat hallucinations and delusions associated with Parkinson’s disease. The company’s share price fell 15% in after-hours trading yesterday.

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Here comes the first MASH drug

After years of starry-eyed analyst estimates and repeated clinical failures, biotech is finally on the verge of launching a treatment for MASH, the prevalent fatty liver disease that has eluded drug developers for a decade.

As STAT’s Adam Feuerstein reports, Madrigal Pharmaceuticals, the company behind a drug called resmetirom, is expecting to win its pioneering FDA approval as early as this week. MASH, previously called NASH, results from the accumulation of fat in the liver, causing inflammation and liver scarring that can progress to cirrhosis, cancer, and the need for a liver transplant. Resmetirom, a daily pill, targets a protein directly in the liver that reduces liver fat, inflammation, and scarring.

“You often hear about millions and millions of people with MASH, but we’re interested in the patients who are most in need — the people who are one or two steps away from converting to cirrhosis,” said Madrigal CEO Bill Sibold, in a January interview with STAT.

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When did Wall Street sour on Lilly’s Alzheimer’s drug?

Last week’s news that the FDA has delayed its decision on Eli Lilly’s treatment for Alzheimer’s disease had only a modest effect on the company’s valuation, suggesting the market had considerably lowered its expectations for a medicine once tabbed for blockbuster success.

Lilly’s stock price has declined about 5% since disclosing that donanemab, an intravenous treatment, would be subject to a previously unexpected hearing of FDA advisers, pushing its potential approval indefinitely. For context, Lilly is still up about 25% for the year, driven by the promise of its GLP-1 treatment for obesity, and it has nearly doubled in value since announcing donanemab’s Phase 3 success in 2023.

The major risk, Leerink analyst David Risinger wrote in a note to clients yesterday, is that donanemab’s delay “could have perception implications” for Lilly’s next Alzheimer’s drug, a subcutaneous treatment called remturnetug. That’s quite a change from just a year ago, when the future of donanemab seemed almost existentially important to Lilly. But that was before GLP-1 became an industry unto itself.

The latest twist in GLP-1 competition

The FDA updated the label of Novo Nordisk’s Wegovy to reflect its long-term cardiovascular benefits. The question now is whether physicians, who were presumably already aware of those benefits, will make prescribing decisions based on that change.

Wegovy, first approved in 2021, will now carry a label explaining that, in addition to its effects on body weight, it can reduce the risk of heart attack, stroke, or cardiovascular-related deaths for patients diagnosed with obesity. Eli Lilly’s Zepbound, a competing treatment approved last year, has a label describing only its power in reducing weight, which appears to be greater than that of Wegovy.

This marks the first test of an emerging conventional wisdom in GLP-1 medicine, which holds that doctors consider Novo’s positive cardiovascular data as extending to the entire class of drugs. Michael Nedelcovych, an analyst at TD Cowen, believes the FDA’s decision will extend Novo’s lead on the market, writing in a note to investors yesterday that the label change “will likely garner some additional attention and add to Wegovy’s tailwind in the face of Zepbound competition.”

More reads

  • Rigid rules at methadone clinics are jeopardizing patients’ path to recovery from opioid addiction, STAT
  • Biden’s $7.3 trillion budget is campaign pitch for spending, tax goals, Reuters
  • New methadone rules are about to take effect. Here are 6 ways treatment could shift, STAT
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