Latest news with #DaveRicks
Yahoo
27-05-2025
- Business
- Yahoo
Here's How the Pharmaceutical Import Tariffs Could Affect Eli Lilly
Tariffs on pharmaceutical imports could hurt Lilly, especially with its dependence on products made in Ireland. However, Lilly might not feel much pain if the Trump administration gives enough time for drugmakers to boost U.S. manufacturing. The president's most favored nation drug pricing could also be problematic for Lilly, but perhaps not as much as feared. 10 stocks we like better than Eli Lilly › Eli Lilly's (NYSE: LLY) share price soared during the first Trump administration. That momentum continued with Joe Biden in the White House. However, it's a much different story so far in Trump's second term. The big pharma stock has taken investors on a roller coaster ride that's on a downward swing right now. Why has Lilly's stock been so volatile? The tariffs on pharmaceutical imports threatened by President Trump stand out as one key factor. Here's how those tariffs could affect Eli Lilly. The White House hasn't implemented tariffs on imported drugs yet. However, President Trump has publicly stated that pharmaceutical import tariffs are on the way. Earlier this year, he proposed levying 25% tariffs on imported drugs. Lilly CEO Dave Ricks acknowledged in his company's first-quarter earnings call on May 3 that expanding tariffs "would have a negative effect on Lilly and for our industry." He didn't provide details, though, on how much of an impact tariffs might have on Lilly. The U.S. imports more pharmaceutical products from Ireland than from any other country -- nearly $50 billion last year. It won't be surprising if the Trump administration especially targets those imports. If so, that could present a big problem for Lilly. Ricks said in the Q1 call that most of his company's product sourcing outside the U.S. comes from Ireland. Lilly reported roughly $3.2 billion of long-lived assets, such as property and equipment, in Ireland at the end of 2024. Although that figure was less than one-fourth the value of long-lived assets in the U.S., it was greater than the drugmaker's total for the rest of the world combined. According to the Irish Independent, the active pharmaceutical ingredient (API) used in Lilly's type 2 diabetes drug Mounjaro is "Ireland's biggest pharmaceutical export to the U.S." This API is also used in the company's weight-loss drug, Zepbound. The Irish newspaper believes that the ingredient "would be the hardest hit if US president Donald Trump puts tariffs on the [pharmaceutical] sector." The Trump administration hasn't provided any specifics about the threatened tariffs on pharmaceutical imports. However, the outlook for Lilly might not be as bad as initially feared. At a White House meeting with executives from several industries on April 30, President Trump proclaimed he wanted to put up "a tariff wall" for drug imports. But the president said that he planned to "give them a lot of time" to move operations into the U.S. first. Ricks noted in the Q1 earnings call that Lilly already "has a large U.S. manufacturing footprint." He said the company has 10 active projects underway to build and expand facilities. Ricks predicted, "Upon completion of our manufacturing agenda, we'll be able to supply medicines for the U.S. market entirely from U.S. facilities, as well as increase the volume of medicines we export." President Trump also issued an executive order on May 12 to implement "most-favored nation" (MFN) drug pricing. He directed Secretary of Health and Human Services Robert F. Kennedy Jr. to set price targets for drugs based on prices paid by other developed nations. In the executive order, Trump warned, "[S]hould drug manufacturers fail to offer American consumers the most-favored-nation lowest price, my Administration will take additional aggressive action." When asked about the possibility of MFN pricing in Lilly's Q1 call, Ricks responded that it presents "a risk for the industry." However, he argued that "it's a nonsensical idea" to only look at the list prices for drugs in the U.S. compared to those in Europe. Is MFN drug pricing a more worrisome issue for Lilly than tariffs? Maybe, but expect a swift legal challenge that could be successful. In 2021, a federal court blocked a similar executive order signed by President Trump during his first term because it didn't follow required procedures and exceeded the executive branch's authority. Even if the courts don't prevent MFN drug pricing from being implemented, drugmakers could get creative. For example, they could increase the list prices of drugs in other developed countries while giving discounts and rebates that keep the cost paid the same as before. Another option is to negotiate price increases with other countries that help keep U.S. prices at highly profitable levels. It remains to be seen how the tariffs and MFN drug pricing stories will play out. I think, though, that Lilly (and other big pharmaceutical companies) will be able to successfully navigate the murky waters regardless of what happens. Before you buy stock in Eli Lilly, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Eli Lilly wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Here's How the Pharmaceutical Import Tariffs Could Affect Eli Lilly was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-05-2025
- Business
- Yahoo
Novo Nordisk Places Bet on CEO Shake-Up to Reclaim Edge in Weight Loss Drug Race
As its obesity medication Wegovy loses a sizable portion of the market to Eli Lilly and Company (NYSE:LLY)'s competing medicine, Zepbound, the Danish pharmaceutical behemoth Novo Nordisk A/S (NYSE:NVO) abruptly announced the resignation of veteran CEO Lars Fruergaard Jørgensenm last week. The stock has dropped by over 49% in the past year, wiping out over $300 billion, whereas Eli Lilly's stock has shot up by around 800% since Dave Ricks, the company's current CEO, took over in January 2017. An elderly couple receiving insulin from a pharmacist, representing healthcare company's successful pharmaceutical products. After Wegovy's debut, Eli Lilly and Company (NYSE:LLY)'s Zepbound quickly gained popularity, topping Wegovy prescriptions in the United States by March 2024 and gaining an estimated 40% of the market for weight reduction medications by August. According to Bernstein analyst Courtney Breen, Zepbound is preferred by physicians as well as patients since it has been shown in clinical trials to provide higher weight loss than Wegovy. Investors were disappointed when Novo Nordisk A/S (NYSE:NVO)'s next-generation obesity medication, CagriSema, which was supposed to emerge in 2026, failed to achieve the weight loss goals they had hoped for. The firm also has to deal with the Trump administration's proposed tariffs on imported drugs, Medicare drug price debates, growing generic competition, and the upcoming patent expirations for Wegovy. The latest licensing agreements for early-stage candidates like Amycretin and others bought from Septerna and United Laboratories International show the company's transition away from peptide-based medications and toward oral small-molecule obesity therapies. Analysts continue to exercise caution regardless of these attempts. According to Evan Seigerman of BMO Capital Markets, Novo Nordisk A/S (NYSE:NVO)'s future is uncertain in the absence of a significant strategic shift. To regain its leadership in the obesity treatment market, the business's unannounced new CEO will need to speed drug introductions, bridge the gap with Eli Lilly, and negotiate changing regulatory and competitive landscapes. While we acknowledge the potential of NVO to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than NVO and that has 100x upside potential, check out our report about this READ NEXT: and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
LLY Q1 Earnings Call: Revenue Beats Expectations, Profit Guidance Trimmed Amid Price Pressures
Global pharmaceutical company Eli Lilly (NYSE:LLY) reported revenue ahead of Wall Street's expectations in Q1 CY2025, with sales up 45.2% year on year to $12.73 billion. The company expects the full year's revenue to be around $59.5 billion, close to analysts' estimates. Its non-GAAP profit of $3.34 per share was 3.4% below analysts' consensus estimates. Is now the time to buy LLY? Find out in our full research report (it's free). Revenue: $12.73 billion vs analyst estimates of $12.62 billion (45.2% year-on-year growth, 0.9% beat) Adjusted EPS: $3.34 vs analyst expectations of $3.46 (3.4% miss) Adjusted EBITDA: $4.25 billion vs analyst estimates of $5.05 billion (33.4% margin, 15.9% miss) The company reconfirmed its revenue guidance for the full year of $59.5 billion at the midpoint Management lowered its full-year Adjusted EPS guidance to $21.53 at the midpoint, a 7.4% decrease Operating Margin: 29%, in line with the same quarter last year Free Cash Flow Margin: 1.2%, similar to the same quarter last year Market Capitalization: $669.8 billion Eli Lilly's first quarter results were driven by significant revenue growth in its key therapeutic areas, notably diabetes and obesity, supported by strong uptake of products such as Mounjaro and Zepbound. Management highlighted the contribution from new launches, expanded reimbursement for immunology products, and the advancement of late-stage pipeline assets. CEO Dave Ricks emphasized the successful Phase 3 data for orforglipron, positioning it as an oral alternative to injectable GLP-1 therapies for chronic diseases. Looking forward, Lilly reconfirmed its annual revenue outlook but lowered its non-GAAP earnings forecast due to ongoing investments and anticipated pricing headwinds. CFO Lucas Montarce noted that mid- to high-single-digit price erosion is expected to persist, while management stressed ongoing uncertainties related to trade policy and reimbursement dynamics. The company is focused on executing its manufacturing expansion and pipeline milestones, with the upcoming orforglipron obesity trial results cited as a key event. Lilly's management attributed the quarter's revenue growth to robust demand for diabetes and obesity therapies, new product launches, and progress in expanding global access. At the same time, profit margins were affected by increased R&D and marketing investments, as well as acquired in-process R&D charges. GLP-1 Portfolio Expansion: Uptake of Mounjaro in diabetes and Zepbound in obesity was a major growth driver, with both products gaining market share in the U.S. and international markets. Zepbound also launched higher-dose vials, aimed at improving patient access through self-pay channels. Immunology and Neuroscience Progress: Ebglyss in atopic dermatitis showed improving patient starts and coverage, with further reimbursement gains anticipated. Kisunla, for Alzheimer's disease, is approved in 12 countries, with increasing adoption but expectations for a gradual build in the market. Manufacturing Investment: The company announced plans to more than double U.S. manufacturing investments, totaling over $50 billion since 2020, including four new facilities to support future supply needs and reduce reliance on imports. Pipeline Advancements: Orforglipron's positive Phase 3 results in diabetes support its potential as an oral GLP-1 therapy, with further obesity data expected soon. Additional late-stage programs in oncology and cardiometabolic health also advanced. Tariff and Pricing Pressures: Management addressed recent U.S. trade policies and pharmacy benefit manager (PBM) decisions, noting that announced tariffs are not expected to materially affect 2025 results, but ongoing pricing and reimbursement negotiations remain a key focus. Management's outlook for the rest of the year centers on maintaining revenue momentum through new product launches and expanded access, while navigating pricing pressures and external policy risks. Pricing and Reimbursement Dynamics: Persistent mid- to high-single-digit price erosion in the U.S. and Europe, influenced by PBM formulary changes and competitive discounting, is expected to weigh on profits. Pipeline and Launch Execution: Upcoming data readouts for orforglipron in obesity, as well as continued launches in international markets for Mounjaro and Zepbound, are seen as crucial for sustaining growth. Manufacturing and Supply Expansion: The scaling of U.S. manufacturing capacity is intended to support both domestic supply and export growth, potentially mitigating risks from future trade or tariff actions. Asad Haider (Goldman Sachs): Asked about the impact of the CVS formulary decision favoring a competitor over Zepbound. CEO Dave Ricks explained that while such PBM moves are expected, Lilly aims to expand access and avoid limiting patient and physician choice. Geoff Meacham (Citibank): Inquired about the breadth of indications for orforglipron and whether its oral format could expand usage beyond current injectable therapies. Dr. Dan Skovronsky indicated confidence in pursuing broader indications, including combinations for immunology and neuroscience. Chris Schott (JPMorgan): Sought clarification on orforglipron's potential role relative to injectables in diabetes and obesity. Management highlighted that a substantial share of patients prefer oral therapies, supporting significant global opportunity. Tim Anderson (Bank of America): Questioned the prevalence of exclusive PBM arrangements in obesity drug coverage. Lilly replied that such 'one of one' formulary strategies are rare but acknowledged ongoing negotiations and market evolution. Evan Seigerman (BMO Capital Markets): Asked about the withdrawal of the heart failure indication for Tirzepatide. Dr. Skovronsky said additional trials are required by the FDA, but noted that patients in the study are already eligible under existing obesity indications. In the coming quarters, the StockStory team will be monitoring (1) the readout of orforglipron obesity trials and subsequent regulatory submissions, (2) progress in expanding U.S. and international reimbursement for key products like Zepbound and Ebglyss, and (3) the pace of manufacturing expansion and its impact on supply reliability. We will also track further data from late-stage pipeline assets and any shifts in PBM or trade policy that could influence pricing or access. Eli Lilly currently trades at a forward P/E ratio of 28.2×. At this valuation, is it a buy or sell post earnings? See for yourself in our free research report. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Indianapolis Star
10-05-2025
- Business
- Indianapolis Star
Eli Lilly, Purdue create $250 million partnership for pharma research as federal cuts hit labs
Eli Lilly and Purdue University are changing how groundbreaking research can be funded as universities and labs across the country grapple with sudden federal funding cuts to vital research. Lilly CEO Dave Ricks and Purdue University President Mung Chiang on May 9 announced a $250 million collaboration to build up pharmaceutical technology in what the two Indiana leaders believe is the largest industry-academic partnership in the country. "It will be focused on accelerating innovation at every stage of the work we do," Ricks said. "And then also on talent, training the workforce of the future to work at Lilly and other advanced pharmaceutical companies." Over the next eight years, Lilly and Purdue will use the investment to speed up several areas of innovation in the pharmaceutical industry, including using AI-powered tools to augment traditional drug discovery methods; incorporating robotics to scale manufacturing capacity; and facilitating the drug pipeline at the future Lilly Medicine Foundry in Lebanon. An existing partnership was set to expire in 2027, but this program, named the Lilly-Purdue 360 initiative, will expand the collaboration and keep it running until at least 2032. The announcement comes as universities are grappling with how to respond to a sudden loss of money from the federal government. Some universities are laying off employees or dipping into endowment funds to keep labs afloat. Chiang said industry partnerships can be used to cover gaps in federal funding, but he cautioned against universities relying exclusively on industry support. He believes Purdue "can win" with a steady combination of industry and federal funding well into the future. "With today's announcement, Lilly and Purdue is taking a leadership position across the entire country with the largest such agreement in scale and perhaps in scope, too, to demonstrate what we can do together," Chiang said. "Now this may not be the only part of the future of research, but it certainly is an increasingly important part and we are proud of a nationally leading agreement today." As part of the agreement, Purdue will make space available for Lilly researchers to work on site at the West Lafayette campus while Purdue researchers will collaborate at Lilly sites in Indianapolis and at the LEAP District along I-65 in Boone County. Dave Ricks on tariffs: Eli Lilly CEO says tariffs are not the answer, urges Trump to move fast on trade deals The Lilly-Purdue partnership will strengthen the university's Lilly Scholars program, which provides full-ride scholarships and paid internships to Purdue undergraduates in STEM. The scholars program is one way Lilly hopes to keep talent in Indiana after they graduate college. Meanwhile, Lilly is continuing to increase how much medicine is manufactured in the United States, a move that could require additional employees. The pharmaceutical giant broke ground on its Medicine Foundry at the LEAP District in Lebanon earlier in the week, a first of its kind facility where clinical trials will be conducted and medicine manufactured. Earlier this year, Lilly announced a $27 billion investment to build four new American manufacturing facilities. Upon completion, Lilly will be able to supply medicine in the U.S. completely from U.S. facilities, Ricks previously said. Jason Thiagarajan, a Purdue sophomore from Bloomington in the Lilly Scholars program, said he hopes the investment will increase mentorship in the program and keep more young professionals like him in the state well into their careers. "I've never been more proud to be born and raised in Indiana," Thiagarajan said.
Indianapolis Star
01-05-2025
- Business
- Indianapolis Star
CVS drops Zepbound from preferred coverage in major blow to Eli Lilly
Show Caption CVS Health announced plans to drop Eli Lilly's Zepbound from its preferred coverage in favor of Novo Nordisk A/S's Wegovy for weight loss — a major blow to the Indianapolis pharmaceutical company. Starting July 1, CVS said it will expand access to blockbuster weight loss drug Wegovy for patients covered by its pharmacy benefit manager, Caremark. The move makes Wegovy the primary weight loss drug in the CVS formulary in the same class of medications as the popular drug Ozempic. CVS said Caremark will offer Wegovy at "a more affordable price." As a pharmacy benefit manager, Caremark negotiates with manufacturers and creates lists of medications that are covered by insurance plans. CVS' announcement overshadowed a strong Q1 earnings report from Lilly and immediately raised concerns from analysts and investors worried about direct competition in the market between Zepbound and Wegovy. Lilly executives remained unfazed about the CVS switch on an earnings call May 1 on which they fielded question after question on Zepbound, particularly on how pharmacy benefit managers might further favor Wegovy. Lilly CEO Dave Ricks highlighted the company's current research to expand weight loss options for patients. "We're not surprised that this kind of thing was announced. If we look at what's happening in the market, we're pretty deep into a replacement cycle, particularly on obesity, and tirzepatide... is gaining a lot of market share, basically most of the growth in the category is happening with our medicine," Ricks said on the earnings call. "Of course, the private pay market is an important segment. We'd like to grow that segment, and we'd like to grow choice and access in that segment, so we're not interested at all in one-of-one deals of reducing access and choice for doctors and patients. We want to expand it," Ricks added. The pharmaceutical giant recently reported successful trials of orforglipron, a daily oral pill that Lilly said shows the same effectiveness as injectable GLP-1 therapies. The pill, if approved by the FDA, is expected to be a major development in the industry that could expand access to and lower the price of groundbreaking weight loss drugs. Lilly's revenue in Q1 increased 45% to $12.73 billion, primarily driven by volume growth in diabetes and weight loss drugs Mounjaro and Zepbound. Lilly's stock fell 11% after the Thursday announcement.
