December 2, 2023

Eli Lilly

stock was climbing again Wednesday after an analyst at Jefferies upgraded the stock following strong sales of the pharmaceutical giant’s diabetes drug, Mounjaro.

Eli Lilly

(ticker: LLY) reported second-quarter earnings Tuesday that beat Wall Street expectations. The drug maker posted revenue of $8.32 billion, which beat analysts’ estimates of $7.58 billion, driven by the major influx in sales of Mounjaro.

Mounjaro is an injection used for the treatment of adults with type 2 diabetes Patients without diabetes who took Mounjaro lost 21.1% of their body weight on average in one recent trial.

Eli Lilly

expects to hear from the Food and Drug Administration on its application for Mounjaro as an obesity treatment by the end of the year.

Eli Lilly said Tuesday there has been such a surge in demand for Mounjaro that it has experienced delays fulfilling orders. This jump in demand was proven in the sales increase of the drug. Revenue of Mounjaro was $979.7 million in the second quarter, a massive increase from sales of $16 million in the same period last year.

Because of this strength, Jefferies analyst Akash Tewari upgraded shares of Eli Lilly to Buy from Hold and raised his price target to $615 from $430.

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“At this point, it’s hard to argue that the obesity class can simply be characterized as an aesthetic short-duration treatment market,” Tewari wrote in a research note.

Tewari also pointed to

Novo Nordisk

(NVO), which reported that its weight-loss drug Wegovy in a trial, known as SELECT, had reduced the risk of heart attack or stroke in obese and overweight patients by 20%, exceeding expectations. The trial results evidence that these new weight-loss drugs can offer health benefits beyond reducing weight.

“We were skeptical that NVO-SELECT would show 15% + benefit (our base case was 11% to13%), but we were wrong. SELECT had a home-run result,” the analyst said.

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Analysts at BMO Capital raised their price target on Eli Lilly to $633 from $565. BMO cited the “outperformance” of Mounjaro and results of the SELECT trial.

Shares of Eli Lilly jumped 1.3% Wednesday to $528.48, which would be an all-time high for the stock. The stock has gained 18% over the last four days, which is its best four-day stretch since July 2002, according to Dow Jones Market Data. Shares of Eli Lilly have climbed 44% this year.

Write to Angela Palumbo at [email protected]

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