Jim Cramer says Eli Lilly isn’t a ‘one trick pony’ after FDA advisers endorse its Alzheimer’s drug

On Monday, a panel of advisors to the Food and Drug Administration unanimously recommended Eli Lilly’s Alzheimer’s drug, currently known as donanemab. The FDA usually follows the panel’s recommendations, so this move brings donanemab closer to receiving full approval in the U.S.

Cramer was impressed that the panel of 11 came to the decision that donanemab’s benefits outweighed its risks. Though not a cure, the drug works to slow the progression of Alzheimer’s by targeting amyloid plaques in the brain, which are considered hallmarks of the fatal disease. Even though the illness is the fifth-leading cause of death for Americans over 65, there are currently very limited treatment options.

But Cramer admitted it’s still uncertain how much market share donanemab will take, noting that some analysts deem Leqembi, a similar drug from Biogen and Esai, safer. But for now, he said, the advisory committee’s decision is an “incremental positive” for Eli Lilly.

“Lilly’s stock has already had a huge run on those GLP-1 numbers, and, as we told members of the investing club, they need to prove to Wall Street that they’ve got something more in the pipeline,
he said. “I think this advisory committee decision on their Alzheimer’s drug does precisely that.”

Eli Lilly did not immediately respond to request for comment.

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Eli Lilly.