With Lilly's Mounjaro set for stardom, an Alzheimer's win would be 'icing on the cake': analysts

With Eli Lilly’s latest Type 2 diabetes launch and obesity hopeful in the running to become “the biggest drug ever,” an approval for donanemab—the company’s experimental antibody effort against Alzheimer’s disease—would simply be “icing on the cake” for investors.

That’s according to analysts at UBS, who think Lilly’s dual GIP and GLP-1 receptor agonist tirzepatide, which was recently cleared by the FDA in diabetes as Mounjaro, could clinch a staggering $25 billion in peak sales. So far, AbbVie's immunology stalwart Humira is the most lucrative drug in biopharma history.

UBS admits it’s “been on the sidelines” with Lilly as it held out for tirzepatide’s diabetes nod plus positive results in weight loss from the company’s SURMOUNT-1 study this year. Now, as Lilly boasts both a diabetes approval and “best-in-class” data in obesity, UBS figures Lilly is “the most attractive name in our large cap coverage.”

Cross-trial comparisons are fickle at best, and they must be taken with a grain of salt. With that in mind, Lilly’s drug did appear to perform better across “several underappreciated metrics” versus Novo’s GLP-1 stalwart semaglutide, which was approved in obesity last year as Wegovy, the UBS team wrote to clients this week.

Novo’s Wegovy—cleared last June on data from four 68-week studies—helped patients lose an average 12.4% of their body weight versus placebo, the FDA said when it handed down its approval decision last summer.

Tirzepatide, meanwhile, helped patients achieve average weight reductions of 16%, 21.4% and 22.5% across 5-mg, 10-mg and 15-mg doses, respectively.

Thanks to tirzepatide’s strong clinical showing, the UBS team figures the drug could reach a sales high of $25 billion—significantly more than Wall Street consensus estimates of roughly $15 billion at peak. Last year, AbbVie's Humira pulled down $20.7 billion, a biopharma record outside of COVID-19 vaccines.

While tirzepatide’s diabetes launch gains steam, UBS foresees an “expedited path as likely” for the drug’s potential obesity nod, possibly in mid-2023. To approach the team's lofty sales projection, the drug would need to reach about 1.6 million obesity patients annually in the U.S., the UBS analysts wrote.

With tirzepatide carrying such high hopes, Lilly’s Alzheimer’s contender donanemab is “not critical” to the analysts’ thesis around Lilly, UBS said. Even still, the analysts view donanemab as the “highest potential late-stage Alzheimer’s asset.”

It remains to be seen whether tirzepatide can reach the heights outlined by UBS. Nevertheless, obesity looks poised to become the “new hypertension,” with the potential to become “the next blockbuster pharma category,” Morgan Stanley Research wrote in a note to clients earlier this year. All told, global obesity sales could reach $54 billion in 2030, the analyst team predicted.

Novo, sizing up the opportunity from Wegovy, recently doubled its own obesity sales target for 2025, by which point it hopes to bring home more than 25 billion Danish kroner ($3.72 billion) in revenue from the fast-growing franchise.

Novo had previously aimed (PDF) to generate around 11.35 billion Danish kroner (roughly $1.69 billion) by the middle of the decade, based on earlier weight loss med Saxenda’s 2019 sales of 5.7 billion Danish kroner ($849 million).