Eli Lilly and Firm’s LLY inventory has risen 21.1% in six months in contrast with a rise of 10.5% for the industry. The inventory has additionally outperformed the sector in addition to the S&P 500 as seen within the chart under.
LLY Inventory Outperforms Trade, Sector & S&P 500
Picture Supply: Zacks Funding Analysis
Lilly has seen unparalleled success with its GLP-1 medication, Mounjaro and Zepbound. Prior to now couple of years, it has acquired approvals for a number of new medication like Kisunla, Omvoh and Jaypirca and witnessed pipeline and regulatory success. Its new medication have been contributing considerably to its top-line progress in 2024. Lilly can also be making speedy pipeline progress in areas like weight problems, diabetes and Alzheimer’s.
Let’s perceive the corporate’s strengths and weaknesses to raised analyze what’s driving the inventory value acquire and play the inventory.
Mounjaro & Zepbound: Key High-Line Drivers for Lilly
Mounjaro and Zepbound embody the identical compound tirzepatide, a twin GIP and GLP-1 receptor agonist (GIP/GLP-1 RA). The GLP-1 section is a vital class of medication for a number of cardiometabolic ailments and is gaining important recognition. Mounjaro was authorised in Could 2022 for kind II diabetes. Zepbound was launched in November 2023 to deal with weight problems.
Regardless of a short while available on the market, Mounjaro and Zepbound have change into key top-line drivers for Lilly in 2024, with demand rising quickly. Since 2020, Lilly has dedicated greater than $18 billion to construct, improve or purchase amenities in the USA and Europe, and the good thing about these investments is exhibiting now as the provision of the medication is rising. Mounjaro and Zepbound generated gross sales of just about $6.7 billion within the first half of 2024, accounting for round 44% of the corporate’s whole revenues.
Tirzepatide can also be being developed for different indications like obstructive sleep apnea (OSA), coronary heart failure with preserved ejection fraction (HFpEF), cardiovascular dangers and metabolic dysfunction-associated steatohepatitis (MASH). Approval for these expanded indications and launch in extra geographies can additional increase gross sales.
Final month, Lilly launched a reduced single-dose vial model of Zepbound, which is predicted to broaden entry for weight problems sufferers, particularly these with out insurance coverage.
Lilly’s tirzepatide medicines face sturdy competitors from Novo Nordisk’s NVO semaglutide. Semaglutide is authorised as Ozempic pre-filled pen and Rybelsus oral pill for kind II diabetes and as Wegovy injection for weight administration. Wegovy gross sales have additionally remained sturdy. Although Novo Nordisk can also be making efforts to enhance the provision of its semaglutide medication, it has not been as profitable as Lilly but.
LLY’s New Medication & Pipeline Success
Aside from Mounjaro and Zepbound, Lilly has gained approvals for another new medication previously yr. These included Omvoh for ulcerative colitis and BTK inhibitor Jaypirca for mantle cell lymphoma and continual lymphocytic leukemia. Lilly expects its new medication Mounjaro, Omvoh, Zepbound, Ebglyss and Jaypirca to drive its high line within the second half of 2024.
In July, Lilly received a long-awaited FDA approval for Kisunla (donanemab) for treating early symptomatic Alzheimer’s illness. Lilly believes Kisunla can generate blockbuster gross sales. Kisunla is barely the second drug available on the market to deal with Alzheimer’s illness after Biogen BIIB and its Japan-based companion Eisai’s Leqembi. Curiously, Kisunla’s label mentions that physicians could think about stopping the dosing of Kisunla based mostly on the discount of amyloid plaques, which might show to be a aggressive benefit.
Lilly is investing broadly in weight problems and has 11 new molecules at present in medical growth, together with two late-stage candidates, orforglipron, an oral GLP-1 small molecule and retatrutide, a GGG tri-agonist. A number of part III information readouts are anticipated in 2025. Whereas rivals like Amgen (AMGN) and Viking Therapeutics are making speedy progress of their GLP-1-based diabetes/weight problems candidates, we imagine they may take time to catch up.
LLY Premium Valuation, Rising Estimates
The inventory is buying and selling at a premium to the business, as seen within the chart under.
LLY Inventory Valuation
Picture Supply: Zacks Funding Analysis
Earnings estimates for 2024 have risen from $13.72 to $16.49 per share over the previous 60 days. For 2025, earnings estimates have risen from $19.42 to $23.97 per share over the identical timeframe.
LLY Estimate Motion
Picture Supply: Zacks Funding Analysis
Spend money on LLY’s Inventory
Lilly has constantly reported sturdy revenues and earnings and dealt properly with expiring patents and rising competitors. The stupendous success of Mounjaro and Zepbound has made it the biggest drugmaker with a market cap of greater than $840 billion. Lilly’s inventory has gone up by greater than 730% previously 5 years, primarily as a result of its strong pipeline potential, notably its weight problems medication. The inventory can also be buying and selling above its 200-day shifting common since previous a number of months and began buying and selling above its 50-day shifting common from early September.
Lilly’s income progress is being pushed by greater demand for Mounjaro, Zepbound, Verzenio and others, which can make up for declining gross sales from Trulicity. Incremental contribution for brand spanking new medication, speedy pipeline progress in areas like weight problems, diabetes and Alzheimer’s and common M&A exercise will preserve the inventory afloat.
Lilly is a good inventory to have in a single’s portfolio at present based mostly on its sturdy general monetary efficiency and sturdy drug pipeline. Persistently rising earnings estimates clearly spotlight analysts’ optimistic outlook for additional progress. Although LLY at present trades at a premium to the business, buyers ought to nonetheless think about including this Zacks Rank #1 (Robust Purchase) inventory as the corporate is on a roll, reaching key medical and regulatory victories and delivering exceptionally sturdy monetary efficiency.
You possibly can see the complete list of today’s Zacks #1 Rank stocks here.
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Biogen Inc. (BIIB) : Free Stock Analysis Report
Novo Nordisk A/S (NVO) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
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