Pro Research: Wall Street challenges Eli Lilly’s prospects

Explore expert insights from Wall Street with this upcoming ProResearch article subscriber investment expert. Enhance your investing strategies with ProPicks, our latest offering that outperforms the S&P 500 by up to 700%.Start the new year with up to 50% off, plus 10% off a 2-year subscription with code Study 23, limited to the first 500 quick registrants. To ensure continued access to valuable content like this, step up your investing game with InvestingPro.

Eli Lilly, a pharmaceutical giant with a strategic focus on treating diabetes, obesity, Alzheimer’s disease and cancer, remains a focus for Wall Street firms. BMO Capital Markets reiterated its confidence in Eli Lilly’s growth trajectory, particularly its diabetes portfolio, and highlighted its GLP-1 treatment tezeparatide (marketed as Mounjaro) and its weight management brand Zepbound . The company expects these products to contribute significantly to Eli Lilly’s market dominance by 2024.

Market performance and product segmentation

Eli Lilly’s diabetes treatment Mounjaro (tezepatide) continued its strong performance, with total prescriptions held steady at 291,225, a slight increase from the previous week. This continued demand underscores Eli Lilly’s strong market acceptance and continued revenue growth potential. Zepbound’s oncology segment is experiencing rapid market penetration, with a significant 192% increase in weekly prescription volumes. Alzheimer’s disease drug Donanemab is expected to further enhance Eli Lilly’s financial prospects, with sales of tilsiparatide expected to reach $4.98 billion in fiscal 2023.

Competitive landscape and market trends

Eli Lilly’s strategic focus on tezepatide to treat type 2 diabetes (T2D) and obesity proved to be a wise choice as the incretin market had a mixed performance, inching up 0.1% overall. Eli Lilly’s Mounjaro and Zepbound are expected to dominate the GLP-1 space by 2024, despite slow growth in the broader market. However, the competitive environment remains challenging, with competing patent disputes and regulatory hurdles putting Eli Lilly’s leadership position at risk.

Regulatory environment and customer base

With the continued growth of tilsiparatide and its anticipated approval in obesity, Eli Lilly’s customer base will expand significantly. The company is adept at navigating supply and demand imbalances and the changing reimbursement environment, which is critical to continued growth.

Management and Strategy

Analysts praised Eli Lilly’s strategic acquisitions and investments in gene-editing technology, which are important to strengthening its drug portfolio and ensuring competitive advantage. With the acquisition of BEAM, the company’s expertise in cardiovascular areas is enhanced and represents a proactive approach to drug development.

Potential impact of external factors

Supply chain management is an important focus for Eli Lilly and Company, especially given the current macroeconomic environment and industry-wide supply constraints. Still, the company’s ability to expertly avoid the FDA’s shortage list demonstrates its resilient supply chain capabilities.

Product coming soon

Zepbound’s launch strategy, including comprehensive dose availability and competitive pricing, is expected to strengthen its market presence. Tezepatide’s dual-brand strategy, Mounjaro for diabetes and Zepbound for weight management, gives Eli Lilly a significant advantage in payer negotiations.

stock performance

BMO Capital Markets maintained Eli Lilly’s “outperform” rating with a price target of $710.00, indicating strong earnings potential. As of December 28, 2023, the stock price has been adjusted to US$580.85, with a market value of approximately US$543.04 billion. Earnings per share (EPS) forecasts for fiscal first and fiscal second years are $6.60 and $12.42, respectively.

bear box

Does Eli Lilly and Company face stiff competition in the incretin market?

Despite Eli Lilly’s significant position in the GLP-1 drug class, it must remain vigilant about the competitive landscape, including potential competitive risks and market saturation. Patent litigation, particularly Mylan Pharmaceuticals’ challenge to Novo Nordisk’s semaglutide, may impact market dynamics.

Will regulatory hurdles impact future product launches from Eli Lilly?

Eli Lilly’s pipeline, which includes an expected submission for Alzheimer’s disease treatment donanezumab, could face regulatory challenges. Successfully overcoming these barriers is critical to preventing product approval and launch delays.

cow case

What are the growth prospects for Eli Lilly and Company’s Mounjaro?

Prescription volume for Mounjaro increased steadily, with new prescriptions rising 2.6% from the previous week, highlighting strong market uptake and the potential for market share growth. Preliminary approval for the obesity treatment would significantly expand Eli Lilly’s market reach.

Can Eli Lilly maintain its strong position in the biopharmaceutical industry?

With a strong pipeline and strategic initiatives, including gene-editing technology, Eli Lilly is well-positioned to lead the sustainability industry. Positive clinical results and upbeat earnings forecasts support the company’s optimistic outlook for the future.

SWOT analysis

strength:

– Has a strong pipeline of potential blockbusters, including donanezumab for Alzheimer’s disease.

– Dominate the diabetes market with Mounjaro.

– Strategic acquisitions and focus on advanced gene editing technologies.

weakness:

– The challenge of maintaining momentum in the GLP-1 drug class compared to potential competitors.

– Legal hurdles may impact future product launches.

Chance:

– Entering the obesity treatment market with tezepatide.

– Potential for revenue growth through label expansion and new drug approvals.

threaten:

– Supply chain issues that may affect product availability and distribution.

– Ongoing patent litigation and market competition pressure.

analyst goals

– Barclays Capital Corporation (BCI) – “Overweight” rating, price target of $630.00 (December 18, 2023).

– BMO Capital Markets – “Outperform” rating, $710.00 price target (December 18, 2023).

– Cantor Fitzgerald – “Overweight” rating, price target $630.00 (November 13, 2023).

This analysis covers September to December 2023.

More information about InvestingPro

Eli Lilly and Company (LLY) was the top performer, and the latest data from InvestingPro backs up that claim. Eli Lilly’s market value is as high as $524.22 billion, demonstrating its heavyweight status in the pharmaceutical industry. The high P/E ratio of 105.16 indicates market optimism about future earnings potential, although it’s worth noting that the adjusted P/E ratio for the trailing two months through the third quarter of 2023 was 66.13, reflecting a more nuanced investor view.

InvestingPro Tips highlights Eli Lilly’s accelerated revenue growth, with its Q3’23 quarterly revenue growth reaching an impressive 36.84%. This acceleration is a testament to the company’s strong product offering and go-to-market strategy. Additionally, Eli Lilly’s commitment to shareholder value is clear, with the company increasing its dividend for nine consecutive years and maintaining dividend payments for an impressive 54 consecutive years.

For investors looking for stability, Eli Lilly and Company’s stock trades with low volatility, an InvestingPro Tip consistent with the company’s high gross margin of 78.67% for the trailing twelve months ending in the third quarter of 2023. This financial health is a reassuring sign for those considering investing in the company.

Currently, InvestingPro subscriptions are at a special New Year discount of up to 50%, allowing investors to gain richer insights to guide their investment decisions.To make the deal even better, use the coupon code Study 23 Get an additional 10% off with a 2-year subscription to InvestingPro+. Eli Lilly and Company has 19 additional InvestingPro Tips for a complete understanding of the company’s strengths and investment potential.

This article was created and translated with the help of artificial intelligence and reviewed by an editor. For more information, please see our terms and conditions.