On Tuesday, Bernstein analysts maintained an Outperform rating for Eli Lilly stock (NYSE:LLY), with a price target of $1,100.00. The endorsement comes as pharmaceutical competitor Novo Nordisk (NYSE:NVO) advances in the development of a drug similar to Eli Lilly’s Retatrutide, a high-efficacy asset in Eli Lilly’s pipeline. According to InvestingPro data, LLY currently trades at $849.63, with analyst targets ranging from $620 to $1,190. The stock has demonstrated strong momentum, delivering a 12.6% return over the past year.
Eli Lilly’s strategic decision to prioritize Retatrutide has gained additional support from recent industry movements. Novo Nordisk has entered into an exclusive licensing agreement with United Laboratories, a Chinese biotech firm, to develop UBT251, a drug that also functions as a GLP1/GIP/Glucagon triple agonist. This deal involves an upfront payment of $200 million, potential milestones payments that could reach $1.8 billion, plus tiered royalties on sales outside of China, Hong Kong, Macau, and Taiwan, which are markets United Laboratories will retain. As a prominent player in the pharmaceuticals industry, Eli Lilly has demonstrated robust financial performance, with revenue growth of 32% and an impressive gross profit margin of 81.31%, according to InvestingPro data.
The transaction reflects a growing trend of China-sourced exclusive licensing agreements within the pharmaceutical industry. Bernstein analysts highlighted the significance of Novo Nordisk’s move into the triple-G mechanism space, seeing it as a validation of Eli Lilly’s approach with Retatrutide. Despite the possibility that UBT251 may offer improved weight loss benefits, Bernstein’s analysis favors Eli Lilly’s lead with Retatrutide in the market.
Eli Lilly’s stock rating and price target remain unchanged, signaling confidence from Bernstein analysts in the company’s market position and future prospects. The Outperform rating suggests that Eli Lilly’s stock is expected to perform better than the overall market or its sector in the eyes of the analysts at Bernstein.
The pharmaceutical industry continues to evolve with companies like Eli Lilly and Novo Nordisk vying for leadership in innovative treatments. The competitive landscape is shaped by strategic partnerships, licensing deals, and the pursuit of assets that promise high efficacy and potential market success. Eli Lilly’s unwavering focus on Retatrutide, as emphasized by Bernstein, positions the company as a strong contender in the space. With a market capitalization of $763 billion and a consistent track record of dividend payments for 55 consecutive years, Eli Lilly demonstrates strong market presence. Want deeper insights? InvestingPro subscribers get access to 13 additional ProTips and comprehensive analysis through the Pro Research Report, helping investors make more informed decisions about this pharmaceutical giant.
In other recent news, Eli Lilly has been the focus of various developments that may interest investors. Jefferies maintained a Buy rating for Eli Lilly, with a price target of $1,020, emphasizing the ACHIEVE-1 Phase 3 trial for the diabetes treatment Orfo. The trial results, expected in the second quarter, are crucial as they could affect the company’s market performance. Meanwhile, UBS analysts have different perspectives, with one maintaining a Neutral rating and another a Buy rating, both with a price target of $1,100. UBS highlighted an uptick in prescriptions for Zepbound, though Eli Lilly’s recent quarterly performances for Zepbound and Mounjaro fell short of expectations.
Eli Lilly’s introduction of Mounjaro in India marks a significant expansion, as the country grapples with rising obesity and diabetes rates. This move positions Eli Lilly ahead of its competitor Novo Nordisk in this market. Additionally, Bernstein SocGen Group reaffirmed an Outperform rating, citing promising pre-clinical data on Retatrutide’s potential in reducing tumor progression in cancer models. The research suggests that Retatrutide may offer superior benefits over existing incretin-based treatments. These developments underscore Eli Lilly’s ongoing efforts to innovate and expand its pharmaceutical offerings.
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