UPDATE: Completion of Lilly's Alzheimer's submission slips out of Q1 after CMS' Aduhelm decision

The timeline for completing an accelerated approval request for Eli Lilly’s Alzheimer’s treatment donanemab has slipped out of the first quarter after the Centers for Medicare & Medicaid Services narrowed coverage for Biogen's rival med to just clinical trial use.

Lilly reported the change during a fourth-quarter earnings report Thursday. CEO David Ricks told Fierce Biotech in January that the company is expecting a decision on the accelerated approval from the FDA sometime this year.

Chief Scientific and Medical Officer Dan Skovronsky, M.D., Ph.D., attributed the delay to the CMS decision to limit coverage of Biogen’s Aduhelm to only patients participating in approved clinical trials.

Lilly’s shares declined over 3% to $243.05, compared to a prior close of $250.83, as the earnings report was delivered.

While FDA's accelerated approval pathway is meant to allow for quicker approval of drugs for serious conditions with an unmet need compared to the standard clinical development pathCMS' national coverage determination, "as currently written, essentially negates that patient benefit in Alzheimer’s disease," Skovronsky said. "Still, we intend to complete our application for accelerated approval for donanemab yet this year, but we now move completion of the accelerated approval submission out of Q1.”

The new timeline for finishing up a rolling submission, which got underway in October 2021, is unclear, but a spokesperson for Lilly told Fierce Biotech that the submission will be wrapped up this year. Executives suggested on the call that they would wait until they had data from the phase 3 Trailblazer 2 studies in hand. Ricks said in an interview last month that the study is due to readout in 2023. The trial is attempting to replicate the findings of an earlier study in the Trailblazer program that met its primary endpoint, according to the CEO.

RELATED: Fierce JPM Week: Confidence is high for Eli Lilly CEO Ricks in showdown with Biogen's Aduhelm

Lilly will provide updates on the submission completion as appropriate, the spokesperson said. 

The CMS decision, which Ricks previously called "a mistake," was a blow to Aduhelm. Biogen has been attempting to fight back to change the agency's mind. The company recorded just $3 million in sales for Aduhelm for the entire year of 2021.

But Lilly's Anne White, president of neuroscience, doesn't expect CMS to change its mind much when the final ruling is issued in April. 

“What matters most to us is ensuring rapid availability of donanemab for patients with that confirmatory phase 3 data," White said during the conference call. “We believe that well-designed and controlled registration trials like Trailblazer Alz and Alz-2 should certainly provide sufficient evidence of clinical benefit for donanemab and that the [coverage determination] is not needed or appropriate for donanemab.”

The spokesperson noted that the coverage determination was "obviously written with a heavy focus on Aduhelm." Lilly will be seeking "critical changes" to how the agency handles future Alzheimer's drugs that have shown a change in cognition and function. 

"We believe that if Trailblazer-ALZ 2 provides positive confirmatory data, CMS and private payors will recognize the potential impact donanemab could have for people living with Alzheimer’s disease," the spokesperson said. 

The company plans to talk with CMS once they have the Trailblazer data, which White said should help make the case for a more traditional coverage scheme.

“And we want the path for this coverage to be clearly laid out,” she said.

RELATED: CMS proposes narrowly covering controversial Alzheimer's drug Aduhelm for patients in clinical trials

Lilly already had modest sales expectations for donanemab, at least until it had the confirmatory Trailblazer data in hand. Skovronsky reiterated that on the earnings call but also said the CMS decision could drive those "low expectations ... for some months beyond" the readout. 

Executives have not said exactly when they were expecting the accelerated approval beyond saying this year.

Investors were eagerly anticipating news on donanemab, with Mizuho analysts predicting this morning that the regulatory submissions appeared to be on track. After the earnings call, Mizuho said the updated timeline "makes sense" given the new dynamics in the Alzheimer's market. The decision to delay the completion of the application does not impact the longer-term forecast for donanemab, according to the firm. 

With the new timeline, Mizuho expects an FDA decision could arrive by late this year or in the first quarter of 2023, if the treatment is granted priority review. 

"Assuming positive Trailblazer-ALZ 2 data, we assume the reimbursement environment will begin to improve and meaningful commercial sales can start in the 2024 timeframe," Mizuho said. 

Fraiser Kansteiner contributed to this report.

Editor's note: This story was updated at 7:40 a.m. ET, Feb. 4, 2022, to include additional commentary from a Lilly spokesperson and Mizuho analysts.