Street Calls of the Week
Investing.com - Bernstein SocGen Group has reiterated an Outperform rating and $1,000.00 price target on Eli Lilly (NYSE:LLY), a pharmaceutical giant with a market cap of $686.5 billion, following the publication of full ATTAIN-1 trial data for its obesity drug Orforglipron. According to InvestingPro data, analyst consensus remains strongly bullish, with price targets ranging from $650 to $1,190.
The data, published in the New England Journal of Medicine, showed weight loss with Orforglipron plateaued around 40 weeks, which Bernstein noted was "the most likely scenario" and "looks manageable" despite being lower than initially expected at the 72-week mark. This development comes as Eli Lilly demonstrates strong financial performance, with impressive revenue growth of 36.8% and an industry-leading gross profit margin of 82.6%.
Safety data appeared better than anticipated, with clear tolerization for side effects like nausea, and low daily incidence rates of gastrointestinal issues, though some rare serious adverse events were reported but "none appear to be unique" to the drug.
The trial demonstrated positive trends in secondary health metrics including HbA1c, triglycerides, and blood pressure, with Bernstein highlighting that 73% of weight loss across all dosage groups came from fat mass, indicating "high quality" results.
Bernstein acknowledged that trial interpretation should consider that the study population was less female (64%) than other obesity trials, potentially leading to lower average weight loss, and that discontinuation rates were affected by increasing availability of other obesity medications in the market.
In other recent news, Eli Lilly has announced that its phase 3 trial of Jaypirca successfully met the primary endpoint for patients with chronic lymphocytic leukemia. The results from this trial will support the company’s efforts to expand the drug’s label for earlier lines of therapy. Meanwhile, Eli Lilly plans to file for regulatory approval of its experimental weight-loss pill, orforglipron, in multiple major markets almost simultaneously. However, the company has expressed uncertainty about utilizing the FDA’s new fast-track review process for this weight-loss pill, citing a lack of understanding of the national priority voucher.
In another development, Eli Lilly launched Lilly TuneLab, an AI and machine learning platform designed to assist biotech companies with drug discovery. This platform is based on proprietary research data valued at over $1 billion. Additionally, Berenberg has downgraded Eli Lilly’s stock rating from Buy to Hold, citing a plateau in the obesity market upgrade cycle despite the company’s strong presence in obesity and diabetes treatments. These recent developments highlight Eli Lilly’s ongoing efforts in drug innovation and market strategy.
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