Eli Lilly Profit Misses as Vaccines Sap U.S. Demand for COVID-19 Drugs

Demand for antibody drugs from Lilly and Regeneron has failed to take off in the United States, given the complexities associated with administering the treatments.

Sales of Lilly’s COVID-19 antibody drug, bamlanivimab, also came under pressure after the U.S. government stopped its distribution as a standalone treatment last month on worries that new variants of the virus could be resistant to it.

The drugmaker is now focusing on a combination of bamlanivimab with another treatment, etesevimab.

“COVID-19 therapies are reducing in their need as the virus is being arrested by vaccines in the United States,” Lilly’s Chief Executive Officer David Ricks said in an interview with CNBC.

Lilly earned $810.1 million from its COVID-19 drugs in the quarter, below estimates of $985 million, according to Guggenheim analysts. Lilly shares fell 4% in premarket trading.

The drugs, which include bamlanivimab as well as its combination with etesevimab, had brought in sales of $871.2 million in the fourth quarter.

The company now expects adjusted full-year earnings of $7.80 to $8 per share from its prior forecast of $7.75 to $8.40 per share.

Sales from COVID-19 drugs are expected in the range of $1 billion to $1.5 billion from $1 billion to $2 billion projected previously.

Excluding items, the company earned $1.87 per share, missing estimates of $2.13 per share, according to IBES data from Refinitiv.

Net earnings fell 7% to $1.36 billion, or $1.49 per share, in the quarter ended March 31.

(Reporting by Manas Mishra in Bengaluru; Editing by Shailesh Kuber and Anil D’Silva)

Eli Lilly Shares Gain Over 4% After Profit Beat; Target Price $225

Indianapolis-based pharmaceutical giant Eli Lilly and Company reported better-than-expected profit in the fourth quarter, led by solid demand for its cancer and diabetes drugs, sending its shares up over 4% in pre-market trading on Friday.

The leading pharmaceuticals company said its net earnings rose to $2.12 billion, or $2.32 per share, from $1.50 billion, or $1.64 per share, seen in the same period a year earlier. That was year-over-year growth of over 41% from the same quarter a year ago. Excluding items, Eli Lilly earned $2.75 per share, higher than the market expectations of $2.35 per share.

In the fourth quarter of 2020, worldwide revenue was $7.440 billion, an increase of 22% compared with the fourth quarter of 2019, driven by a 24% increase in volume and a 1% increase due to the favourable impact of foreign exchange rates, partially offset by a 4% decrease due to lower realized prices.

Eli Lilly shares rose over 4% to $219 in pre-market trading on Friday; the stock surged above 28% in 2020.

Eli Lilly Stock Price Forecast

Eleven analysts who offered stock ratings for Eli Lilly in the last three months forecast the average price in 12 months at $194.90 with a high forecast of $225.00 and a low forecast of $150.00.

The average price target represents a -7.24% decrease from the last price of $210.12. From those 11 analysts, eight rated “Buy”, three rated “Hold”, and none rate “Sell”, according to Tipranks.

Morgan Stanley gave a base target price of $190 with a high of $231 under a bull scenario and $143 under the worst-case scenario. The firm currently has an “Overweight” rating on the pharmaceutical company’s stock.

Several other analysts have also recently commented on the stock. Berenberg raised the target price to $190 from $150. BofA Global Research upped the price objective to $225 from $195. Guggenheim increased the price objective to $210 from $186. Citigroup raised the stock price forecast to $210 from $146. Mizuho upped to buy from neutral and raised the target price to $222 from $164.

Analyst Comments

“We are Overweight Eli Lilly (LLY) shares as we believe consensus underappreciates Lilly’s long-term revenue and EPS growth prospectsl. We project 2020e-2025e CAGR revenue +8% and EPS +12%. We see upside potential for pipeline candidate tirzepatide’s “trifecta” opportunity in diabetes, obesity, and cardiovascular health,” said David Risinger, equity analyst at Morgan Stanley.

“Pipeline newsflow on diabetes and Alzheimer’s candidates could drive stock upside/downside, but we view LLY’s Alzheimer’s pipeline as an inexpensive call option. Lilly could pursue additional tuck-in transactions to enhance long-term growth prospects.”

Upside and Downside Risks

Risks to Upside: Upside risks are financial results above expectations, positive pipeline news (e.g. tirzepatide for diabetes and Alzheimer’s-related newsflow), competing products disappoint, and compelling external action – highlighted by Morgan Stanley.

Risks to Downside: Financials miss, pipeline disappoints (e.g. tirzepatide), negative Alzheimer’s newsflow, competing drugs surprise on the upside, and drug pricing concerns increase.

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Eli Lilly Jumps After Alzheimer’s Drug Shows Positive Results

Eli Lilly and Company (LLY) shares rocketed 11.74% Monday after the Indianapolis-based drug manufacturer said its experimental Alzheimer’s drug significantly slowed the rate of decline in patients.

The treatment, called donanemab, showed effectiveness at slowing the decline of patients’ ability to think by 32% relative to a placebo in a mid-stage clinical study of 272 people conducted over two years. The drug works by removing a form of plaque known as beta-amyloid in an Alzheimer’s patient’s brain.

“This unique mechanism and antibody for clearing plaques, discovered at Lilly, has the potential to provide high levels of durable amyloid plaque clearance after limited dosing,” the company’s Chief Scientific Officer Daniel Skovronsky wrote in a statement, per Investor’s Business Daily. The company said it will undertake further studies in a 500-patient trial to gain additional insight into the drug’s effectiveness.

Through Monday’s close, Eli Lilly stock has a market capitalization of $177.87 billion and trades 10% higher on the year. Over the past month, the shares have gained 16.18%. From a valuation standpoint, the stock trades at around 20 times forward earnings, roughly in-line with its five-year earnings multiple.

Wall Street View

Cantor Fitzgerald’s Louise Chen said that the successful study was great news for the drugmaker. She added that the results pave the way for an application for regulatory approval. Elsewhere, sell-side research firms remain mostly bullish on the stock. It receives 11 ‘Buy’ ratings and 7 ‘Hold’ ratings. At this time, no analyst recommends selling the shares.

Price targets range from a Street-high $209 to a low of $149. The median 12-month price target of $190 represents a modest 2% premium to yesterday’s $185.94 close. Watch for additional re-ratings in the months ahead as further details emerge about the drug’s effectiveness and commercial application.

Technical Outlook and Trading Tactics

After breaking above an inverse head and shoulders pattern in December, the price formed a flag over the holiday season. However, yesterday’s news-driven breakout propelled the stock through key overhead resistance to a new all-time high (ATH) on heavy volume. Moreover, the 50-day simple moving average (SMA) recently crossed above the 200-day SMA to indicate a new uptrend is in place.

Given the relative strength index (RSI) sits in overbought territory, active traders should consider waiting for a retracement entry to the $170 level, where previous resistance now provides support. Those who take a long position in this area should protect capital with a stop-loss order placed beneath the flag pattern at $161.78. Book profits by using a target that is at least twice the amount of the stop used. For instance, target a $20 move if using a $10 stop.

For a look at today’s earnings schedule, check out our earnings calendar.

Eli Lilly to Buy Prevail Therapeutics in $1.04 Billion Deal, Shares Soar

Indianapolis-based pharmaceutical company Eli Lilly announced to acquire a biotechnology company Prevail Therapeutics in a deal worth $1.04 billion to expand its business in gene therapy, sending its shares up over 3% on Tuesday.

According to the deal, Lilly will commence a tender offer to acquire all outstanding shares of Prevail Therapeutics Inc. for a purchase price of $22.50 per share in cash. The deal is expected to close in the first quarter of 2021.

Following this announcement, Prevail shares surged about 90% to as high as $23.08.

Moreover, Eli Lilly forecasts next year’s revenue between $26.5-$28 billion and sales of nearly $1-$2 billion from its COVID-19 treatments. That would be largely driven by strong financial and operational performance in 2021, highlighted by volume-based revenue growth, operating margin expansion, pipeline advancements and solid cash flow.

Earnings per share (EPS) for 2021 are expected to be between $7.25 to $7.90 on a reported basis and $7.75 to $8.40 on a non-GAAP basis.

“Lilly issued 2021 revenue guidance 3% above and EPS in-line with consensus due to higher-than-expected R&D spending. Excluding COVID-19 therapy revenues, which are short duration, core revenue guidance is 3% above consensus,” said David Risinger, equity analyst at Morgan Stanley.

At the time of writing, Eli Lilly’s shares traded 3.01% higher at $162.67 on Tuesday; the stock is up over 20% so far this year.

Eli Lilly Stock Price Forecast

Ten equity analysts forecast the average price in 12 months at $172.80 with a high forecast of $200.00 and a low forecast of $144.00. The average price target represents a 7.08% increase from the last price of $161.38. From those 10 analysts, seven rated “Buy”, three rated “Hold” and none “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $170 with a high of $207 under a bull-case scenario and $121 under the worst-case scenario. The firm currently has an “Overweight” rating on the pharmaceutical’s stock.

Several other analysts have also upgraded their stock outlook. Guggenheim raised the stock price forecast to $183 from $178; Berenberg upped the target price to $150 from $144; Mizuho lowered the price objective to $156 from $164. Truist began coverage on Eli Lilly and set a “buy” rating and a $180 price objective. At last, JP Morgan boosted their price objective and to $200 from $190 and gave the stock an “overweight” rating.

Analyst Comments

“We are Overweight Eli Lilly shares as we believe consensus underappreciates Lilly’s long-term revenue and EPS growth potential. We project 2020e-2025e CAGR revenue +8% and EPS +14%. We see upside potential for pipeline candidate tirzepatide’s “trifecta” opportunity in diabetes, obesity, and cardiovascular health,” Morgan Stanley’s said Risinger added.

“Pipeline newsflow on diabetes and Alzheimer’s candidates could drive stock upside/downside, but we view Eli Lilly’s Alzheimer’s pipeline as an inexpensive call option. Lilly could pursue additional tuck-in transactions to enhance long-term growth prospects.”

Upside and Downside Risks

Risks to Upside: Upside risks are financial results above expectations, positive pipeline news (e.g. tirzepatide for diabetes and Alzheimer’s-related newsflow), competing products disappoint, and compelling external action- highlighted by Morgan Stanley.

Risks to Downside: Financials miss, pipeline disappoints (e.g. tirzepatide), negative Alzheimer’s newsflow, competing drugs surprise on the upside, and Democratic election sweep causes drug pricing concerns.

Eli Lilly’s Baricitinib Gets FDA Approval for Emergency Use with Remdesivir to Treat COVID-19 Patients

Eli Lilly and Company, an American pharmaceutical company headquartered in Indianapolis, said its arthritis drug, baricitinib, in combination with Gilead Sciences Inc’s remdesivir, received an emergency use authorization from the U.S. Food and Drug Administration for the treatment of hospitalized patients with COVID-19.

The authorization is temporary and does not replace the formal review and approval process. In the U.S., baricitinib has not been approved by the FDA to treat COVID-19, and the efficacy, safety and optimal duration of treatment of baricitinib for COVID-19 has not been established. This is the first combination regimen authorized by FDA. Evaluation of baricitinib’s efficacy and safety as a treatment for COVID-19 is ongoing in clinical trials, the company said.

Eli Lilly shares closed 2.3% higher at $143.41 on Thursday; the stock is up about 10% so far this year.

Executive Comments

“Since the start of the COVID-19 pandemic, Lilly has been committed to finding potential treatments to help people around the world who’ve been impacted by this virus,” said David A. Ricks, Lilly chairman and CEO.

“Today’s FDA action for baricitinib marks the second Lilly therapy to be granted an EUA, in addition to the recent neutralizing antibody EUA for high-risk non-hospitalized patients, increasing the number of treatment options for COVID-19 patients at different stages of the disease. This is an important milestone for hospitalized patients on oxygen, as baricitinib may help speed their recovery.”

Eli Lilly Stock Price Forecast

Ten equity analysts forecast the average price in 12 months at $173.00 with a high forecast of $200.00 and a low forecast of $144.00. The average price target represents a 20.63% increase from the last price of $143.41. From those ten analysts, seven rated “Buy”, three rated “Hold” and none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $170 with a high of $207 under a bull-case scenario and $121 under the worst-case scenario. The firm currently has an “Overweight” rating on the pharmaceutical company’s stock.

Several other analysts have also upgraded their stock outlook. Mizuho lowered their target price to $156 from $164. Bernstein started with market-perform rating; target price $150. Berenberg Bank initiated coverage and set a “hold” rating and a $144.00 price target. ValuEngine cut Eli Lilly and to a “sell” rating from a “hold”. At last, JP Morgan boosted their price objective to $200 from $190 and gave the stock an “overweight” rating.

Analyst Comments

“We are Overweight Eli Lilly shares as we believe consensus underappreciates Lilly’s long-term revenue and EPS growth potential. We project 2020e-2025e CAGR revenue +8% and EPS +14%. We see upside potential for pipeline candidate tirzepatide’s “trifecta” opportunity in diabetes, obesity, and cardiovascular health,” said David Risinger, equity analyst at Morgan Stanley.

“Pipeline newsflow on diabetes and Alzheimer’s candidates could drive stock upside/downside, but we view Eli Lilly’s Alzheimer’s pipeline as an inexpensive call option. Lilly could pursue additional tuck-in transactions to enhance long-term growth prospects,” Risinger added.

Eli Lilly Says Antibody Lowers Risk of Hospitalization for Mild COVID-19 Patients

Eli Lilly and Company, an American pharmaceutical company headquartered in Indianapolis, said that its experimental antibody, LY-CoV555, reduces the rate of hospitalization for patients with mild or moderate symptoms of COVID-19, sending its shares up about 2% on Wednesday.

Of the total 302 patients treated with three different doses of LY-CoV555, five of them, or 1.7%, had to be admitted to a hospital or visit a hospital emergency room. That compares with a rate of 6%, or 9 out of 150, for trial patients given a placebo, the company said, Reuters reported.

Only the middle dose, 2,800 milligrams, achieved the trial’s main goal of reducing the amount of virus detected in patients compared to a placebo 11 days after treatment, it added.

“The results reinforce our conviction that neutralizing antibodies can help in the fight against COVID-19,” Daniel Skovronsky, Lilly’s chief scientific officer, said in a statement.

“We are grateful to the patients, physicians, and staff that have participated in this trial,” Skovronsky continued. “We look forward to continued data generation as this trial proceeds.”

Eli Lilly’s shares rose about 2% at 152.56 on Wednesday; also, the stock is up over 16% so far this year.

Eli Lilly stock forecast

Nine analysts forecast the average price in 12 months at $176.38 with a high forecast of $190.00 and a low forecast of $164.00. The average price target represents a 17.52% increase from the last price of $150.08. From those nine equity analysts, seven rated “Buy”, two rated “Hold” and none rated “Sell”, according to Tipranks.

Morgan Stanley gave a target price of $176 with a high of $214 under a bull-case scenario and $125 under the worst-case scenario. Eli Lilly And Co had its price target boosted by stock analysts at Guggenheim to $185 from $182.

Other equity analysts also recently updated their stock outlook. Several other equity analysts have also updated their stock outlook. Mizuho lifted their price target on Eli Lilly And Co to $164 from $155.00 and gave the stock a “neutral” rating. UBS Group downgraded shares to “neutral” from “buy” but raised their price objective to $158 from $157. Cfra raised their price target to $167 from $146.00 and gave the stock a “hold” rating.

Analyst views

“We are Overweight Eli Lilly (LLY) shares as we believe consensus underappreciates Lilly’s long-term revenue and EPS growth potential. We project 2020e-2025e CAGR rev +9% and EPS +14%. We see upside potential for pipeline candidate tirzepatide’s ‘trifecta’ opportunity in diabetes, obesity, and cardiovascular health,” said David Risinger, equity analyst at Morgan Stanley.

“Pipeline news flow on diabetes and Alzheimer’s candidates could drive stock upside/downside, but we view LLY’s Alzheimer’s pipeline as an inexpensive call option. Lilly could pursue additional tuck-in transactions to enhance long-term growth prospects.”

Upside and Downside Risks

Upside: Upside risks are financial results above expectations, positive pipeline news (e.g. tirzepatide for diabetes and Alzheimer’s-related news flow), competing products disappoint, and compelling external action, highlighted by Morgan Stanley.

Downside: Financials miss, pipeline disappoints (e.g. tirzepatide), negative Alzheimer’s news flow, competing drugs surprise on the upside, and Democratic election sweep causes drug pricing concerns.

Eli Lilly’s Price Target Raised to $176 with Overweight Rating, $214 in Best Case: Morgan Stanley

Eli Lilly and Company’s, an American pharmaceutical company headquartered in Indianapolis, price target was raised to $176 from $157 with ‘Overweight’ stock rating, according to Morgan Stanley equity analyst David Risinger, who also said that they are bullish on prospects for Phase 3 diabetes asset tirzepatide and shares offer Alzheimer’s optionality.

On Thursday, the U.S. Food and Drug Administration approved two additional doses of Eli Lilly and Company’s Trulicity (dulaglutide), sending its shares up over 2% last week. The stock is up about 15% so far this year.

“We extended our model to 2025e, and our 2025e EPS is 7% above consensus. We project 5-year 2020e-2025e CAGR revision of 9% and EPS of 14%. Our 2025e revision of $36.2B is 7% above consensus $34.0 billion and EPS of $14.20 is 7% above cons’ $13.27,” Morgan Stanley’s Risinger said.

“Our 2025e operating margin of 40.0% compares to consensus’ 40.6%; we are slightly below based upon our assumption for greater reinvestment spending. Among Global Pharma, Lilly ranks among the fastest growers and has the least patent expirations over the next five years.”

Eli Lilly forecasts earnings per share for 2020 to be in the range of $6.48 to $6.68 on a reported basis and $7.20 to $7.40 on a non-GAAP basis. The leading pharmaceuticals company said they anticipate 2020 revenue between $23.7 billion and $24.2 billion.

Morgan Stanley target price under a bull-case scenario is $214 and $125 under the worst-case scenario. Eli Lilly And Co had its price target boosted by stock analysts at Guggenheim to $185 from $182.

Several other equity analysts have also updated their stock outlook. Mizuho lifted their price target on Eli Lilly And Co to $164 from $155.00 and gave the stock a “neutral” rating. UBS Group downgraded shares to “neutral” from “buy” but raised their price objective to $158 from $157. Cfra raised their price target to $167 from $146.00 and gave the stock a “hold” rating.

Nine analysts forecast the average price in 12 months at $176.38 with a high forecast of $190.00 and a low forecast of $164.00. The average price target represents a 16.88% increase from the last price of $150.91. From those nine, seven analysts rated ‘Buy’, two analysts rated ‘Hold’ and none rated ‘Sell’, according to Tipranks.

“We are Overweight Eli Lilly (LLY) shares as we believe consensus underappreciates Lilly’s long-term revenue and EPS growth potential. We project 2020e-2025e CAGR rev +9% and EPS +14%. We see upside potential for pipeline candidate tirzepatide’s ‘trifecta’ opportunity in diabetes, obesity, and cardiovascular health,” Morgan Stanley’s Risinger added.

“Pipeline newsflow on diabetes and Alzheimer’s candidates could drive stock upside/downside, but we view LLY’s Alzheimer’s pipeline as an inexpensive call option. Lilly could pursue additional tuck-in transactions to enhance long-term growth prospects.”

Upside risks: Upside risks are financial results above expectations, positive pipeline news (e.g. tirzepatide for diabetes and Alzheimer’s-related newsflow), competing products disappoint, and compelling external action, highlighted by Morgan Stanley.

Downside risks: Financials miss, pipeline disappoints (e.g. tirzepatide), negative Alzheimer’s newsflow, competing drugs surprise on the upside, and Democratic election sweep causes drug pricing concerns.

Check out FX Empire’s earnings calendar