On Friday, Deutsche Bank maintained a positive stance on Eli Lilly (NYSE:LLY) shares, reiterating a Buy rating and a $1,025.00 price target. The affirmation comes after the release of Phase 2a study results for a competing drug, monlunabant, by Novo Nordisk (NYSE:NVO), which were deemed less than impressive by the analyst.
The data indicated that monlunabant achieved approximately 5.8% placebo-adjusted weight loss at 16 weeks for the 10mg dose. Higher doses of 20mg and 50mg did not show significant additional weight loss.
The performance of monlunabant in obese patients is contrasted with Eli Lilly's own drug candidate, orforglipron, which has shown more promising results in similar trials. In Phase 2 trials, orforglipron demonstrated a placebo-adjusted 16-week weight loss of up to approximately 6.5% in obese patients with Type 2 diabetes and around 7% in patients with obesity alone. The analyst suggests that these results position orforglipron favorably against monlunabant.
Despite the lower-than-expected efficacy at higher doses, Novo Nordisk reported that the most common side effects from monlunabant were gastrointestinal issues. Neuropsychiatric side effects, including anxiety, irritability, and sleep disturbances, were generally mild to moderate. Notably, the press release indicated an absence of suicide risk, a serious concern that has affected other drugs targeting the CB1 receptor in the past.
Novo Nordisk is planning to conduct a larger Phase 2b trial of monlunabant in obesity in 2025 to explore dosing and safety over an extended period. This move appears to be a cautious approach by Novo, as indicated by Deutsche Bank's European colleague Emmanuel, due to concerns around the safety profile of monlunabant.
Eli Lilly's orforglipron is anticipated to have key Phase 3 readouts in the second half of 2025. The Deutsche Bank analyst's outlook suggests that the underwhelming results of monlunabant remove a potential competitive threat to Eli Lilly's orforglipron, which is being developed as a small molecule-based oral treatment for obesity.
In other recent news, Eli Lilly has seen a series of significant developments. The FDA has approved EBGLYSS, a new eczema treatment by Eli Lilly, based on results from three clinical studies. This comes after successful Phase III trial results for Eli Lilly's once-weekly insulin efsitora, showing A1C reduction non-inferior to daily basal insulins. The company has also announced a $1.8 billion investment to expand its manufacturing facilities in Europe.
Eli Lilly has appointed Lucas Montarce as its new Chief Financial Officer, a move part of the company's ongoing strategic planning. Analyst firms such as BMO Capital, TD Cowen, and Evercore ISI have maintained positive ratings on Eli Lilly's shares, reflecting confidence in the company's growth trajectory.
The company has also entered into a collaboration with EVA Pharma to increase the availability of baricitinib, an immunological treatment, in 49 African countries. Moreover, Eli Lilly has completed the acquisition of Morphic Holding (NASDAQ:MORF), Inc., adding a therapy for inflammatory bowel disease to its portfolio. These are the recent developments from Eli Lilly.
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