Lilly Joins Biogen as Alzheimer’s Drugs Finally Emerge

Both drugs use antibodies that attack amyloid plaque found in the brains of Alzheimer’s victims. They are the first shown to slow early-stage cognitive decline. While only a subset of the more than six million Americans with Alzheimer’s will be eligible for treatment, analysts expect sales of Lilly’s donanemab to hit $3.9 billion in 2027. Lilly stock, already lifted by its obesity drugs, trades at 42 times next 12-month earnings.

There’s no clear winner yet. Analysts say that donanemab appears slightly more effective than Leqembi, but with a slightly riskier side-effect profile. While Leqembi is given intravenously every two weeks over an indefinite time span, donanemab is infused once a month until the plaque is gone.

Meanwhile, Dublin-based
Prothena
has an antibody that attacks not amyloid plaque, but so-called tau tangles. Prothena shares leapt in May, when
Bristol Myers Squibb
paid $55 million to exercise an option to invest in the therapy, which is in early trials. The stock is up nearly 140% in the past 12 months.

Last Week

Markets

It was a turnabout week: The
Dow Jones Industrial Average
won; the
Nasdaq Composite
lost. The Dow’s winning streak hit 10 days—Friday was a squeaker—the most since September 2017, as recession fears faded and earnings for Dow stalwarts like
Johnson & Johnson
and banks not named
Goldman Sachs
shone. At the Nasdaq, things were bumpier, due to
Tesla
(down 9.7%) and
Netflix
(off 8.4%). The Nasdaq thudded 2.1% on Thursday, its biggest decline since March 9. Hardly a disaster: The index is up 34% for 2023, and the Dow, 6.3%. The
S&P 500
falls in between at 18.2%.

Companies

Bank of America
and
Morgan Stanley
beat expectations, while Goldman struggled as it cleaned up its consumer effort and GreenSky acquisition in a moribund M&A market.
Charles Schwab
beat, as deposits rebounded. Netflix added six million subscribers by cracking down on passwords, but missed on revenue. Tesla saw margins shrink on price cuts. J&J beat and raised its guidance. Blackstone assets passed $1 trillion.

Deals

Microsoft
agreed to a 10-year deal with
Sony
to win approval for its
Activision Blizzard
acquisition, and extended the closing to Aug. 29. The FTC paused the merger’s trial, opening the door to a settlement, and published an update of M&A guidelines, laying out its pro-competition policy. Russian President Putin exited the Ukraine grain accord, bombed Odesa, and seized
Carlsberg
and
Danone
assets.

Next Week

Tuesday 7/25

Earnings season rolls on, with several tech titans releasing results.
Alphabet
and Microsoft report on Tuesday.
Meta Platforms
follows suit on Wednesday. With the Nasdaq 100 already up 41% this year, the bar to impress investors would seem quite high. This past week, shares of both Netflix and Tesla fell more than 8% the day after they announced earnings.

Wednesday 7/26

The FOMC announces its monetary-policy decision. Wall Street is certain that the central bank will raise the federal-funds rate by a quarter of a percentage point to 5.25%-5.50%, possibly the last rate hike for this cycle.

Thursday 7/27

The BEA releases its advance estimate for second-quarter gross-domestic-product growth. Economists forecast a seasonally adjusted annual growth rate of 1.4%.

Friday 7/28

The BEA reports the core personal consumption expenditures price index for June, which is expected to rise 4.2% from a year earlier, four-tenths of a percentage point less than in May.

Write to Josh Nathan-Kazis at [email protected] and Bill Alpert at [email protected]