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Eli Lilly and Company (NYSE:LLY), a prominent pharmaceutical player with a market capitalization of $710 billion and impressive revenue growth of 36% over the last twelve months, is acquiring Verve Therapeutics for $1.3 billion. Bernstein SocGen Group has responded by reiterating its Outperform rating and $1,100 price target on the pharmaceutical giant. According to InvestingPro, Eli Lilly maintains a "GREAT" financial health score, suggesting strong positioning for strategic acquisitions.
The acquisition strengthens Eli Lilly’s gene-editing capabilities, specifically gaining Verve’s proprietary lipid nano-particle delivery technology for mRNA and gRNA. This technology includes GalNAc targeting ligand that ensures appropriate liver delivery for cardiometabolic conditions. With a P/E ratio of 64.3, Eli Lilly’s valuation reflects market confidence in its innovative pipeline and growth potential.
Verve has three leading candidates under development targeting Lp(a), PCSK9, and ANGPTL3 for atherosclerotic conditions. Both Lp(a) and PCSK9 are well-validated targets with multiple assets under development from competitors including Merck (NSE:PROR), Amgen (NASDAQ:AMGN), and AstraZeneca (NASDAQ:AZN).
Bernstein views the deal favorably, noting it’s "a deal that only LLY could do" given its early-stage nature and Eli Lilly’s previous risk mitigation through two collaborations. The firm considers the deal value balanced, especially when accounting for cash and prior milestone commitments Eli Lilly had already made. Want deeper insights? InvestingPro offers exclusive access to 13 additional ProTips and comprehensive financial analysis for Eli Lilly, helping investors make informed decisions.
The acquisition further deepens Eli Lilly’s presence in the cardiometabolic field and expands its range of severity options, building upon the company’s current leadership positions in obesity and diabetes treatments. With analyst targets ranging from $650 to $1,190 and a strong dividend history spanning 55 consecutive years, Eli Lilly continues to demonstrate its commitment to both growth and shareholder returns.
In other recent news, Eli Lilly has announced an acquisition agreement with Verve Therapeutics valued at up to $1.3 billion, including an upfront payment of approximately $1.0 billion. This acquisition marks a significant move in the gene-editing sector, particularly as Verve is developing single-dose gene-editing medicines targeting cardiovascular disease. The deal includes a premium of 113% over Verve’s 30-day average trading price, reflecting a strategic shift towards innovative genetic medicine. Additionally, Eli Lilly’s weight-loss medication, Zepbound, continues to perform strongly, with Bernstein SocGen Group reiterating an Outperform rating and maintaining a $1,100 price target for the company’s stock. Zepbound has shown robust growth against competitors, with new prescriptions outpacing those of Novo Nordisk (NYSE:NVO)’s Wegovy. Eli Lilly has also announced that all doses of Zepbound vials will be available for $499 or less per month through its Self Pay Journey Program. Furthermore, the company is set to present significant data at the upcoming American Diabetes Association meeting, including information on its diabetes and muscle-wasting treatments. These developments underscore Eli Lilly’s focus on expanding its presence in genetic medicines and addressing chronic health conditions.
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