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Business Insider
3 days ago
- Business
- Business Insider
Eli Lilly (LLY) Bulls Eye $1,000 Stock Price Target as GLP-1 Alpha Bandwagon Rolls On
Eli Lilly & Co. (LLY) has emerged as one of the most compelling opportunities in the market today. The company is entering the prime of its new chapter, focused on leading the way in weight loss and diabetes treatments. I recently sold my Novo Nordisk (NVO) shares—not because I doubt Novo's science, but because I believe Lilly boasts stronger management, superior operational execution, and greater upside potential over the next one to three years. My 12-month price target for Lilly is $1,100. Confident Investing Starts Here: GLP-1 Leadership with Clinical Momentum Lilly's recent breakthrough has been nothing short of transformational. Its dual GLP-1 therapy, tirzepatide—marketed as Mounjaro for diabetes and Zepbound for obesity—is dominating the market, generating $3.84 billion and $2.31 billion in Q1 FY2025 revenues, respectively. Even more impressive, tirzepatide has shown superior weight loss results compared to Novo Nordisk's semaglutide (Ozempic, Wegovy), with Zepbound users achieving around 20% weight loss versus roughly 14% in Wegovy studies. The data is clear, and momentum is firmly on Lilly's side. Adding to my confidence is the strength of Lilly's product pipeline. Orforglipron, an oral GLP-1 candidate, recently delivered compelling Phase 3 results as the first oral, non-peptide GLP-1 agonist to match the efficacy of injectable therapies—potentially revolutionizing the patient experience in weight-loss treatment. Meanwhile, retatrutide, a triple-agonist targeting GLP-1, GIP, and glucagon receptors, achieved a remarkable 24% weight loss in early obesity trials and is advancing rapidly through Phase 3. If these next-generation drugs succeed, they could unlock hundreds of billions in new market value. Management & Manufacturing Excellence Compound Returns Great companies aren't built on strong drugs alone—they're built on strong management. What stands out most about Eli Lilly isn't just its innovative pipeline but the exceptional execution behind it. CEO David Ricks and his team have shown remarkable conviction in targeting diabetes and obesity as key growth drivers, backing that vision with massive investment. Since 2020, Lilly has poured over $50 billion into expanding U.S. manufacturing mega-sites capable of producing injectables and oral medications at scale. This is not only a bet on growth but a strategic move to reduce future risks. With Novo Nordisk facing supply constraints, Lilly's vertical integration of manufacturing infrastructure is a smart play to avoid similar pitfalls. That kind of foresight is exactly what I want managing my investments. Lilly's performance backs this up— Q1 Fiscal 2025 showed gross margins at a stellar 83.5%, up year-over-year. While R&D spending grew, it didn't outpace revenue, creating operating leverage. Selling and administrative costs rose 26%, but top-line revenue jumped 45%, signaling intelligent growth. With a forward P/E near 35 and a sales multiple around 11, Lilly isn't cheap, but it doesn't need to be. Earnings are projected to surge nearly 40% in Fiscal 2026, justifying the valuation. In my view, the market still undervalues Lilly's resilience and staying power. Technical Positioning & Price Outlook After peaking near $955 last year, Lilly shares have pulled back to around $720. On May 14, the stock's relative strength index hit 35, signaling strong value by most technical measures. For retail investors like me, that's a clear opportunity alert. While the stock remains below both its 50-day and 200-day moving averages after a 'Death Cross' indicating short-term bearish momentum, I consider that noise irrelevant for medium- to long-term investors. I view this as a rare chance to buy into a powerhouse at a discount. Given the current earnings growth trajectory, I believe shares will not only revisit but likely surpass their all-time highs soon. My 12-month price target of $1,100 implies roughly 50% upside. Fundamentally, the market is still coming to grips with the massive potential of the GLP-1 market, and I see few obstacles standing in the way of sustained growth. Is Eli Lilly a Buy, Sell, or Hold? On Wall Street, Eli Lilly has a consensus Strong Buy rating with 16 Buys, one Hold, and one Sell rating. LLY's average stock price target is $1,003.14, indicating almost 40% upside potential in the next 12 months. That's slightly below my own more bullish estimate, but still remarkable nonetheless. Healthcare Powerhouse Poised for Long-Term Growth Eli Lilly is a completely different company than it was just two or three years ago—now an innovation-driven, operationally disciplined giant leading the biggest secular growth story in healthcare. This isn't a quick trade for me; it's a long-term hold as Lilly scales its GLP-1 pipeline with promising new launches like orforglipron and retatrutide. With management's vision, strong clinical execution, disciplined approach, and significant valuation upside, LLY stands out as one of the most compelling stocks on the market. I've confidently taken my position and am ready to hold steady through the next few years of growth.
Yahoo
09-05-2025
- Business
- Yahoo
Down Nearly 20%: Should You Buy the Dip on Eli Lilly?
Several factors have contributed to Lilly's share price decline, including earnings misses and increased competition. However, Lilly's growth prospects still look promising. 10 stocks we like better than Eli Lilly › For a while, it seemed as if Eli Lilly (NYSE: LLY) could do no wrong. Its shares skyrocketed. The company's market cap grew so much that it was within striking distance of the $1 trillion mark. Along the way, Lilly became the largest healthcare company in the world based on market cap. However, the situation isn't so rosy for Eli Lilly now. The big pharma stock has fallen nearly 20% below its peak set last year. Some dark clouds hover on the horizon. Should you buy Lilly on the dip? There isn't just one factor behind the decline in Lilly's share price. However, the biggest issue for the drugmaker is a common one for high-flying stocks: Lilly didn't meet Wall Street estimates. Unfortunately, the company has failed to deliver the results analysts expected in two out of the last three quarters. The worst miss was in the third quarter of 2024, when Lilly's earnings came in roughly 19.5% below the consensus estimate. More recently, the big pharma company narrowly missed earnings expectations by around 3.4%. Regardless of the size of the miss, though, investors expect a stock with a forward price-to-earnings ratio of 36.6 to be practically perfect. Concerns about rising competition in the obesity drug market have also weighed on Lilly's share price. Novo Nordisk is on track to file for regulatory approval of CagriSema in early 2026. CVS Health recently chose Novo Nordisk's weight-loss drug Wegovy as a preferred drug on its formulary over Zepbound. Roche teamed up with Zealand Pharma, which has a promising weight-loss drug in clinical development. Viking Therapeutics is advancing its experimental obesity drug VK2735 into late-stage clinical testing. To add more uncertainty to the mix, the Trump administration has threatened major tariffs on pharmaceutical imports. Lilly CEO David Ricks acknowledged in the company's Q1 earnings call that tariffs "would have a negative effect on Lilly and for our industry." Reuters also recently reported that the White House is considering implementing international reference pricing, which would peg the price Medicare pays for prescription drugs to the prices that other major countries pay. Ricks said in the Q1 call that looking at U.S. versus European list prices for drugs in isolation is "a nonsensical idea." Why consider buying Lilly stock with these issues in the forefront? The most important reason to invest in the drugmaker is still its growth prospects. Sales are booming for Lilly's tirzepatide products, Mounjaro and Zepbound. The company's market share for incretin analogs now tops 50%. Notably, Lilly's market share is increasing while Novo Nordisk's share is decreasing. Lilly's pipeline features other promising obesity drugs as well. The company plans to file for approvals of orforglipron (a weight-loss pill taken daily) later this year, pending successful completion of current phase 3 studies. Lilly hopes to follow up with regulatory submissions of orforglipron as a treatment for type 2 diabetes in the first half of 2026. Breast cancer drug Verzenio continues to enjoy solid momentum, with sales jumping 10% year over year in Q1. The therapy is especially growing in international markets. Lilly has 25 programs in late-stage testing, notably including Jaypirca as a first-line monotherapy for chronic lymphocytic leukemia and olomorasib in treating non-small cell lung cancer. The company also awaits regulatory approvals for tirzepatide in heart failure with preserved ejection fraction and imlunestrant in breast cancer. Should investors buy Lilly stock on the dip? I think it's important to weigh all the pros and cons first. However, the balance tips in favor of investing in this drugmaker, in my opinion. I fully expect Lilly to remain a dominant player in the obesity and type 2 diabetes markets. The company should continue to make inroads in oncology and other indications. The Trump administration's potential pharmaceutical tariffs and Medicare pricing changes are wild cards that could change the dynamics. Still, though, I think Lilly's sell-off presents a buying opportunity. 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 $613,546!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $695,897!* Now, it's worth noting Stock Advisor's total average return is 893% — a market-crushing outperformance compared to 162% 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 5, 2025 Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends CVS Health, Novo Nordisk, Roche Holding AG, and Viking Therapeutics. The Motley Fool has a disclosure policy. Down Nearly 20%: Should You Buy the Dip on Eli Lilly? was originally published by The Motley Fool
Yahoo
05-05-2025
- Business
- Yahoo
With compounders out of the way, Lilly and Novo go after each other
This story was originally published on PharmaVoice. To receive daily news and insights, subscribe to our free daily PharmaVoice newsletter. The game is afoot in the obesity space as GLP-1 rivals Eli Lilly and Novo Nordisk take their showdown to a new level. Lilly revealed in a first-quarter earnings report last week that it now has a 53% share of the GLP-1 market, overtaking Novo for the first time. The pharma giant also reported a 45% increase in revenue during the first three months of the year, bringing in nearly $13 billion. Zepbound, its tirzepatide medication designated for obesity and a recent sleep apnea indication, brought in $2.3 billion during the quarter, while the Type 2 diabetes version Mounjaro raked in $3.8 billion. Despite this huge growth, Lilly's stock price tumbled last week after the company downgraded its earnings per share expectations for the year. However, its 2025 revenue guidance remained unchanged from estimates released in February. Additionally, Novo made moves that impacted Lilly's share price. The Danish drugmaker announced new telehealth partners to expand its direct-to-consumer reach and cash-pay offerings, and scored a triumph over Lilly with one of the nation's largest pharmacy benefit managers. At the same time, both pharmas are riding a little higher since the FDA pulled the plug on compounded GLP-1s in April. The copycat versions offered patients a cheaper alternative to Lilly and Novo's name-brand obesity meds while they were in shortage, which has since been resolved. While Lilly is tying up loose ends by suing four telehealth companies that were still selling now-illegal compounded tirzepatide last month, the long-fraught situation is largely coming to end for now. With compounders out of the way, Lilly and Novo have their sights set squarely on one another as they clamor for market dominance through expanding DTC platforms, new indications and next-generation GLP-1s. The same day Lilly released its first-quarter earnings, Novo announced that its obesity GLP-1 Wegovy will be the preferred drug of CVS Carmark's standard formulary starting July 1. The deal is a win for Novo as both pharmas have faced an uphill battle getting insurers on board with coverage of GLP-1 drugs, which carry a roughly $1,000 per month list price. The arrangement with CVS will give Novo a huge boost by increasing access to Wegovy for CVS' patients 'at a more affordable price,' Prem Shah, CVS executive vice president and group president at CVS Health, said during the company's earnings call last week. CVS did not publicize the exact estimated savings for Wegovy. Lilly CEO and chairman David Ricks downplayed the impact, claiming he was not 'surprised that this kind of thing was announced' on the call with analysts. He also highlighted tirzepatide's growing market share and the expanding private market. Lilly and Novo both entered the DTC arena with self-pay options for lower-priced vials of their GLP-1 medications rather than self-injectable pen doses. Other Lilly executives similarly minimized the PBM news, but refused to share how many patients receiving Zepbound were covered under CVS Caremake plans. 'For us, we will just continue to execute as strongly as we can and I think we have tremendous momentum in the marketplace,' Patrick Jonsson, Lilly's president of cardiometabolic health, said during the call. In addition to the formulary decision, Novo will also offer a self-pay option for patients to receive Wegovy for $499 per month through CVS pharmacies. It's the latest expansion for the pharma's platform, NovoCare Pharmacy, which launched in March, and part of its growing arsenal of DTC offerings.. Novo partnered with telehealth company Hims & Hers, which previously sold compounded GLP-1s, with a 'bundled' deal that includes all doses of Wegovy and a Hims & Hers membership for $599 per month. Hims & Hers already sells Lilly's Zepbound and Mounjaro through its services, but Lilly noted that the pharma giant has no affiliation with the provider and does not offer its lower self-pay option on the platform. The out-of-pocket cost for Zepbound on Hims & Hers was listed at nearly $1,900 per month. Novo also announced last week that it's teaming up with Ro, another telehealth platform, to offer Wegovy at $499 per month. The deal comes about six months after Lilly partnered with Ro via its established DTC platform LillyDirect for Zepbound vials at a cost between $349 and $599 per month. Despite Novo's recent plays to expand its DTC business and find favor with PBMs, some analysts aren't optimistic the Danish pharma will retake pole position in market share, The Wall Street Journal reported. Novo is also gunning to get ahead of Lilly in the oral GLP-1 market, and last month filed for an approval of its obesity pill. But Lilly is close behind with its oral obesity med, orforglipron, after announcing positive phase 3 data in April and a plan to submit for approval by the end of the year. Executives highlighted the oral pill's potential during the earnings call last week. 'We know that … approximately 25% of the patients in the U.S. suffer from needle fear,' Jonsson said. 'That positions us very nicely to be a first line incretin for both Type 2 [diabetes] and chronic weight management. The other benefits as well… we can scale and reach patients that is more or less impossible with only injectables. It provides a huge global opportunity for us with orforglipron and also from a manufacturing side, probably a significant benefit as well.' Executives also noted that the oral options could potentially work as combination drugs for multiple indications in the future. Orforglipron was one bright spot in Lilly's pipeline, but it also announced it pulled its application for a heart failure indication for tirzepatide after the FDA said more trials were required. Lilly said additional data from other trials may support resubmission. Recommended Reading Can anything threaten Novo and Lilly's obesity market dominance?
Forbes
03-05-2025
- Health
- Forbes
Trump May Explore Most Favored Nation Model To Lower Drug Prices
The Trump administration may resurrect a prescription drug pricing initiative, the most favored ... More nation model, which would peg U.S. prices of certain medications to the prices paid in peer countries. The Trump administration may resurrect a most favored nation model which would peg what healthcare providers get paid for certain medications in the Medicare program in the United States to prices in peer countries. It's unknown which prescription drugs could be targeted or whether such a model could be implemented through executive or legislative action. Should it be pursued, it would face considerable challenges in terms of implementation. At the beginning of the year, I cited an interesting nugget posted by Fierce Pharma, which suggested that a most favored model could be revisited by the then incoming Trump administration. Eli Lilly CEO David Ricks had met with then President-elect Trump and pointed to the possibility of raising pharmaceutical prices in other wealthy nations as a key strategy to offset potential reductions in prices in the U.S. This seemed to hint that international price referencing for certain prescription drugs could be on the table during the second Trump administration, specifically a most favored nations model that would pay (reimburse healthcare providers) no more for high-cost physician-administered drugs than the lowest price drug manufacturers receive in other countries with similar gross domestic product per capita, adjusted for purchasing power. In 2018 and 2020, the Department of Health and Human Services proposed different methods to reduce Medicare prescription drug spending in the U.S. by tying prices of physician-administered drugs to those in other comparably wealthy countries. This effort was blocked in the courts. Nevertheless, Reuters reported last week that the Trump administration is again weighing the policy. There are several options that may be considered. Under an Affordable Care Act provision, the Centers for Medicare and Medicaid Services have the authority to test payment models through demonstration or pilot projects. In this context, the Center for Medicare and Medicaid Innovation—also known as the 'Innovation Center'—is authorized under the ACA to design, implement and test novel healthcare payment models to address growing concerns about rising costs, quality of care and inefficient spending. In lieu of an executive order that instructs the Innovation Center to pursue international price referencing in Medicare, legislators could pass a separate law. Or, the administration may try and leverage the existing Inflation Reduction Act, which already allows for drug price negotiations, except with a set of parameters and rules that does not include international benchmarks. These executive and legislative branch policy options would face formidable logistical and potential legal challenges. For one thing, what to do with prescription drugs that are approved in the U.S. by the Food and Drug Administration, but either haven't (yet) been granted marketing authorization in reference nations or are not (yet) reimbursed (and therefore lacking an ex-U.S. price). There is also an issue that arises when countries don't post what they pay for drugs on a net basis. Courts could intervene to block the federal government from doing something unprecedented in the U.S.: Setting prices based on international benchmarks, which rely on price controls. Using such references could violate the Commerce Clause contained in the U.S. Constitution. Should, however, international price referencing be implemented in some way, shape or form, drugmakers may react by delaying launches outside of the U.S. or withdraw their products altogether in certain countries. Alternatively, they could respond to the imposition of lower U.S. prices by attempting to re-negotiate contracts with reference countries to increase ex-U.S. prices. In fact, in a letter published by the Financial Times in April, CEOs of pharmaceutical firms urged the European Union to 'fairly reward innovation' with higher drug prices. But this would be very difficult to achieve, given the severe budgetary and legal constraints across Europe with respect to the prices of medicines. In addition, European systems of healthcare must contain costs to guarantee the sustainability of universal access to pharmaceuticals, which are often free for patients (or with nominal charges) at the pharmacy counter. Allowing for higher prices could undermine this objective. Capping what is paid or reimbursed to healthcare providers based on an international price referencing system would probably result in lower net prices than have thus far been achieved in IRA price negotiations. Politico reported last year that the Congressional Budget Office issued a report in which a most favored nation model would in fact yield comparatively sizable cost savings for the Medicare program. Nonetheless, if the Trump administration revives a most favored nation model it would be confronted with logistical and possible legal challenges that may be hard to overcome.
Yahoo
02-05-2025
- Business
- Yahoo
Eli Lilly and Co (LLY) Q1 2025 Earnings Call Highlights: Record Revenue Growth and Strategic ...
Revenue Growth: Increased by 45% compared to Q1 2024. Key Products Revenue: Grew by more than $4 billion, accounting for $7.5 billion of total revenue. Gross Margin: 83.5% in Q1, up 1 percentage point from the previous year. Marketing, Selling, and Administrative Expenses: Increased by 26%. R&D Expenses: Increased by 8%. Acquired IP R&D Charges: $1.57 billion, impacting EPS by $1.72. Non-GAAP Performance Margin: 42.6%, an increase of over 11 percentage points from Q1 2024. Effective Tax Rate: 20.2% for Q1. Earnings Per Share (EPS): $3.34, inclusive of a $1.72 negative impact from acquired IP R&D charges. US Revenue Growth: Increased by 49% in Q1. Europe Revenue Growth: Increased by 71% in constant currency. Japan Revenue Growth: Increased by 15% in constant currency. China Revenue Growth: Increased by 21% in constant currency. Rest of World Revenue Growth: Increased by 17% in constant currency. Mounjaro Sales: $3.8 billion, more than double from the previous year. Zepbound Sales: Increased by $1.8 billion to $2.3 billion in the quarter. Dividends and Share Repurchase: $1.3 billion in dividends and $1.2 billion in share repurchase. Warning! GuruFocus has detected 12 Warning Signs with EXC. Release Date: May 01, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Eli Lilly and Co (NYSE:LLY) reported a 45% increase in revenue compared to Q1 2024, driven by key products such as Mounjaro and Zepbound. The company achieved several key pipeline milestones, including the approval of Jaypirca in the EU for CLL and Omvoh in the US, EU, and Japan for Crohn's disease. Eli Lilly and Co (NYSE:LLY) shared promising Phase III clinical data for orforglipron, an oral GLP-1, showing potential for significant impact in Type 2 diabetes and obesity. The company announced plans to more than double its US manufacturing investment, with over $50 billion in new investments since 2020. Eli Lilly and Co (NYSE:LLY) distributed $1.3 billion in dividends and executed a $1.2 billion share repurchase in Q1 2025. Marketing, selling, and administrative expenses increased by 26%, driven by promotional activities for new launches. R&D expenses rose by 8%, primarily due to higher development costs for late-stage assets and early-stage research investments. The company recognized acquired IP R&D charges of $1.57 billion, negatively impacting earnings per share by $1.72. Eli Lilly and Co (NYSE:LLY) faces potential challenges from tariffs and trade dynamics, which could negatively affect its financial outlook if expanded. The company withdrew its US application for the heart failure with preserved ejection fraction indication for tirzepatide, as the FDA requires an additional confirmatory clinical trial. Q: In light of the CVS formulary announcement, what is your expectation on market share dynamics for Mounjaro and Zepbound, and how will you navigate the PBM environment? A: David Ricks, CEO, stated that while the CVS announcement was not surprising, Lilly is focused on expanding choice and access rather than reducing it. The company aims to continue driving share and preference for its brands, emphasizing the development of innovative medicines like orforglipron, which offers the convenience of an oral GLP-1 with injectable-like efficacy. Q: What is the strategic positioning of orforglipron in the market, and are there plans for broader indications beyond diabetes and obesity? A: Daniel Skovronsky, Chief Scientific Officer, highlighted that orforglipron's oral convenience makes it suitable for broad primary care indications. Lilly plans to pursue various directions, including potential combinations with other mechanisms in immunology and neuroscience. The company is also developing additional oral incretins and multifunctional orals. Q: How do you see orforglipron competing in the core obesity and diabetes market relative to injectables, and what share do you envision for orals? A: Patrik Jonsson, President of Lilly Cardiometabolic Health, noted that orforglipron has significant opportunities, particularly as 50% of Type 2 diabetes patients prefer oral medication. The oral form allows for greater scalability and global reach compared to injectables, positioning it as a first-line incretin for both Type 2 diabetes and chronic weight management. Q: Can you discuss the pricing strategy for orforglipron and how having a portfolio of weight loss medications might impact PBM discussions? A: Patrik Jonsson explained that while specific pricing details are not disclosed until launch, having a portfolio allows Lilly to target different patient segments effectively. David Ricks added that Lilly aims to reduce the gap between list and net prices, promoting more transparent pricing and reducing rebate flows. Q: Regarding the CVS announcement, how do you view this development in terms of GLP-1 market dynamics and access? A: David Ricks expressed that while the CVS decision might reduce choice, Lilly's focus remains on innovation and differentiation. The company believes in expanding access and choice, and despite the CVS decision, Lilly will continue to drive innovation and market growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
