JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Thursday, Bernstein SocGen Group maintained its Market Perform rating and DKK620.00 price target for Novo Nordisk (CSE:NOVOb) (NOVOB:DC) (NYSE: NYSE:NVO), following the company’s announcement of a new direct-to-patient access program for its obesity drug Wegovy in the United States. The program, NovoCare Pharmacy, is designed to assist patients who require Wegovy (semaglutide) but either lack insurance coverage or are not covered for the drug. Priced at $499 per month, the program allows patients to send their prescriptions directly to NovoCare Pharmacy, which then ships the medication directly to them. Their main competitor, Eli Lilly (NYSE: NYSE:LLY), currently valued at $835 billion, remains a prominent player in the pharmaceuticals industry according to InvestingPro data.
The analyst noted this development as a minor positive step, but also stated that it is too early to adopt a more optimistic stance on Novo Nordisk’s stock. The company’s Chief Financial Officer had highlighted at the fiscal year investor event that supply issues are expected to improve gradually over the year. However, prescription rates for Wegovy have not yet begun to increase, and a 30% growth in volume is required to meet the company’s full-year group sales guidance of a 20% increase.
The analyst also pointed out that prescription acceleration is necessary to reassure investors and enhance sentiment towards Novo Nordisk’s shares. At present, competitor Eli Lilly is capturing a significant share of new patients in the market. Eli Lilly’s strong position is reflected in its impressive 32% revenue growth and 81% gross margin over the last twelve months, according to InvestingPro analysis. Despite the launch of NovoCare Pharmacy, the analyst expressed caution due to anticipated mixed news flow throughout the year, including increased competition from Eli Lilly and potential pricing pressure from the Inflation Reduction Act, as well as the expected introduction of generics in Canada’s diabetes market next year, as confirmed by Sandoz (SIX:SDZ)’s CEO during their fiscal year call. For comprehensive analysis of both companies and access to over 20 key financial metrics and ProTips, investors can explore detailed Pro Research Reports available on InvestingPro.
In other recent news, Eli Lilly has made significant strides in its financial and strategic initiatives. The company announced a substantial $27 billion investment in U.S. manufacturing, building upon the $50 billion committed since 2020, aiming to enhance its domestic production capabilities. Additionally, Eli Lilly plans to establish four new U.S. manufacturing facilities to meet the high demand in the Diabesity sector, which Deutsche Bank (ETR:DBKGn) views as a positive development. The company also expanded its self-pay program by introducing new dosage options and reducing prices for existing vials, a move seen by BMO Capital as potentially increasing demand from cash-paying patients.
Analysts have expressed varying levels of confidence in Eli Lilly’s stock. Bernstein reiterated an Outperform rating with a $1,100 price target, highlighting the potential impact of upcoming data readouts and a robust early-stage pipeline. Similarly, JPMorgan maintained an Overweight rating, also with a $1,100 target, citing anticipation for significant Phase 3 trial results for orforglipron, a drug candidate for Type 2 Diabetes and obesity. Meanwhile, BMO Capital and Deutsche Bank both upheld their ratings with $1,010 price targets, noting strategic expansions and investments as positive indicators.
Eli Lilly’s proactive engagement with the current administration and its strategic investments are seen as reinforcing its market position. The company’s focus on innovation and expanding access to its products aligns with broader industry trends and government goals. These developments reflect Eli Lilly’s commitment to growth and adaptation in a dynamic market landscape.
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