On Friday, Leerink Partners maintained a positive outlook on shares of Eli Lilly and Company (NYSE:LLY) shares, reiterating an Outperform rating and a price target of $950.00. The pharmaceutical giant, currently valued at $672.54 billion, has shown impressive revenue growth of 27.41% over the last twelve months.
According to InvestingPro analysis, while the stock appears overvalued at current levels, it maintains a strong financial health rating. The endorsement comes in response to new clinical trial data from a competitor's weight loss drug, which Leerink believes reinforces the market potential for Eli Lilly's tirzepatide.
The recent Phase 3b STEP UP trial by Novo Nordisk (NYSE:NVO), which is not rated by Leerink, reported a 20.7% average weight loss in nondiabetic obese patients after 72 weeks using a higher 7.2 mg dose of semaglutide. This result is comparable to Eli Lilly's Phase 3 SURMOUNT-1 trial of tirzepatide, which showed up to a 22.5% weight loss at the same time point.
Although Novo Nordisk has not released detailed tolerability data for the 7.2 mg dose of semaglutide, they indicated that it was safe and well-tolerated, with most adverse events being gastrointestinal and diminishing over time.
Leerink Partners anticipates more comprehensive results from the STEP UP trial to be presented at a medical conference later in the year. The firm also notes that, based on historical data, tirzepatide has shown better tolerability when compared cross-trial to the lower 2.4 mg dose of semaglutide.
In Eli Lilly's SURMOUNT-1 trial, patients taking the highest dose of tirzepatide experienced nausea and vomiting rates of 31% and 12%, respectively. In contrast, Novo Nordisk's STEP-1 trial of 2.4 mg semaglutide reported higher rates of these side effects, at 44% for nausea and 25% for vomiting.
Leerink's continued support for Eli Lilly's stock reflects confidence in the long-term market share of tirzepatide, especially given the comparative efficacy and tolerability data. With an impressive gross profit margin of 80.91% and consistent dividend payments for 55 consecutive years, Eli Lilly demonstrates strong operational efficiency.
Eli Lilly's shares remain a top pick for Leerink Partners as the pharmaceutical industry continues to advance in the development of treatments for obesity. For deeper insights into Eli Lilly's financial health and growth prospects, including 15 additional ProTips and comprehensive valuation metrics, visit InvestingPro.
In other recent news, Eli Lilly has been at the center of numerous developments. The pharmaceutical giant's revenue expectations for 2024 and 2025 were recently released, with projections ranging between $58 billion and $61 billion. Analysts from Guggenheim, Bernstein, BMO Capital, Wells Fargo (NYSE:WFC), and Citi have maintained positive ratings on the company, despite a shortfall in Q4 revenue.
Furthermore, Eli Lilly has received FDA approval for Omvoh, a drug designed to treat adults with moderately to severely active Crohn's disease. The approval comes after successful results from the Phase 3 VIVID-1 trial. The company has also recently acquired Scorpion Therapeutics' PI3Kα inhibitor program in a deal that could reach up to $2.5 billion.
In addition, the company's near-term pipeline developments, including the Phase 3 results for the drug orforglipron, are drawing attention. Analysts predict that the performance of the diabetes drug tirzepatide in 2025 will be scrutinized, especially concerning international markets. Eli Lilly's financial outlook and pipeline progress remain key factors for investors as they evaluate the company's performance.
Lastly, Eli Lilly has filed marketing applications for Omvoh in Crohn's disease in the European Union and Japan, with additional global submissions planned. The company has also provided patient support programs, including co-pay assistance, for eligible patients. These are some of the recent developments for Eli Lilly.
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