Eli Lilly jumps 10% after it says it will seek approval for its Alzheimer's drug following designation as a breakthrough therapy by the FDA

• Eli Lilly jumped 10% on Thursday after the company said it would seek accelerated approval for its Alzheimer's drug.
• Donanemab received a breakthrough therapy designation from the FDA on Thursday following phase two data.
• The move comes just weeks after Biogen received FDA approval for its Alzheimer's drug despite criticisms around insufficient data.
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Shares of Eli Lilly jumped as much as 10% on Thursday after the company said it would seek accelerated approval for its Alzheimer's drug candidate, donanemab.

The announcement from the Indianapolis-based firm comes alongside news that the FDA designated the drug as a breakthrough therapy, setting it up for an expedited approval process. Donanemab met its primary endpoint in a phase two trial earlier this year.

Investors are likely bullish on the potential approval for Eli Lilly's Alzheimer's drug candidate, given that the FDA recently approved a controversial Alzheimer's treatment, called Aduhelm, from Biogen. Many argued, including some scientists on an FDA panel reviewing the drug, that the data provided by Biogen was insufficient to receive approval.

Eli Lilly said it would file for accelerated approval of donanemab later this year, even though it is still in the midst of running its phase 3 trial of the drug. Eli Lilly's decision surprised one Wall Street analyst.

Goldman Sachs analyst Terence Flynn said in a note on Thursday that Eli Lilly seeking accelerated approval for the drug "is ahead of our expectations as we believed there was a likelihood the FDA could have requested additional safety data from the ongoing Phase 3 trial."

Flynn added that the potential approval of donanemab could "lead to questions on nearer-term market share for Biogen's Aduhelm." Shares of Biogen fell as much as 7% in Thursday trades.

Goldman Sachs rates Eli Lilly as a Buy with a $270 price target, representing potential upside of 24% from Wednesday's close.