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UPDATE 3-Lilly to seek accelerated FDA approval for Alzheimer's drug this year

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(Adds analyst comments, background; updates shares)

By Manojna Maddipatla

June 24 (Reuters) - Eli Lilly and Co said it will seek accelerated approval from the U.S. health regulator this year for its Alzheimer's candidate, weeks after a rival drug from Biogen Inc won the agency's endorsement using the same regulatory pathway.

Lilly's shares jumped over 8% on Thursday, while Biogen fell nearly 5%.

Biogen's Aduhelm was approved under the FDA's accelerated approval program that allows certain drugs on the market earlier based on evidence they can likely benefit patients. Such approvals require follow-up studies to confirm the drugs work as intended.

The agency has taken fire for the approval that came despite a nearly unanimous recommendation from a panel of outside experts that said Biogen had failed to prove its drug benefited patients.

Like Aduhelm, Lilly's candidate, donanemab, is designed to remove clumps of a hallmark Alzheimer's protein called beta amyloid from the brain.

Lilly said on Thursday it would file the application based on data from a mid-stage, 272-patient trial, which in January showed donanemab slowed the rate of decline in a combined measure of cognition and function.

"Following the approval of Biogen's Aduhelm earlier this month based in large part on its ability to lower amyloid plaque, we have been assuming this (accelerated approval) might be a possible path for Lilly to take," Mizuho analyst Vamil Divan said in a note.

Some analysts, however, said investors were not expecting Lilly to file the application for donanemab until the drugmaker had data from a larger, late-stage study next year or by 2023.

The FDA granted donanemab breakthrough therapy designation, meant to expedite the development and review of drugs for serious conditions.

Biogen's second Alzheimer's drug candidate, lecanemab, with partner Eisai Co also got the designation on Wednesday, and Guggenheim analyst Yatin Suneja expects the same for Roche Holding AG's rival drug gantenerumab.

(Reporting by Manojna Maddipatla in Bengaluru; Editing by Shinjini Ganguli)

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