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Evercore ISI has maintained an In Line rating on shares of pharmaceutical giant Eli Lilly (NYSE: LLY), following the company's announcement regarding new vial forms for its medications Mounjaro and Zepbound.
The firm clarified that the new pricing options for self-pay patients, which are $399 for a 2.5 mg dose and $549 for a 5 mg dose, are in line with the current net prices of the drugs.
Eli Lilly's current list prices for a one-month supply of Mounjaro and Zepbound are approximately $1069, but the net price is estimated to be around $450-500 for Mounjaro and approximately $650 for Zepbound.
The announcement of the new vial forms does not represent a price cut, as the prices are similar to the net prices already in effect.
Moreover, the new 2.5 and 5 mg vial forms of Mounjaro are the lowest doses available, which do not offer the maximum weight loss benefits as compared to the 10-15 mg doses. According to the medication label, the 5 mg dose results in an average of 15% weight loss, whereas the higher doses can lead to 20-21% weight loss.
Evercore ISI pointed out that despite the introduction of these new forms, there is no expectation for a decrease in earnings estimates for Eli Lilly. In fact, there is evidence suggesting that the net price for patients may improve.
Previously, a savings card for patients with commercial insurance but without coverage for Mounjaro was approximately $650 per month, which has increased from the earlier amount of around $550 per month.
In other recent news, Eli Lilly and Company (NYSE:LLY) introduced more affordable Zepbound single-dose vials for obesity treatment, with prices set at least 50% lower than other similar medications. In clinical studies, the drug demonstrated an average weight loss of 15% over 72 weeks.
Meanwhile, Eli Lilly's Alzheimer's drug, donanemab, is anticipated to face denial by the United Kingdom's National Health Service. However, the company's tirzepatide has shown significant weight loss results in a phase 3 study, reducing the risk of progression to type 2 diabetes.
Eli Lilly has also completed its acquisition of Morphic Holding (NASDAQ:MORF), Inc., adding MORF-057, a therapy targeting inflammatory bowel disease, to its portfolio. In governance news, Marschall S. Runge, M.D., Ph.D., a director at Eli Lilly, is set to retire from the company's board of directors in 2024.
Lastly, the Biden administration has selected Jardiance by Eli Lilly for price negotiations with the Medicare health program, an initiative projected to save the U.S. government $6 billion in the first year from newly negotiated lower prices.
InvestingPro Insights
In light of Eli Lilly's (NYSE:LLY) recent announcements and Evercore ISI's maintained In Line rating, it is noteworthy to consider the company's financial health and market performance. According to InvestingPro data, Eli Lilly boasts a substantial market capitalization of $855.88 billion, reflecting its significant presence in the pharmaceutical industry. The company's revenue has shown robust growth, with a 31.87% increase over the last twelve months as of Q2 2024, indicating a strong upward trajectory in sales.
InvestingPro Tips highlight that Eli Lilly has been consistent in rewarding its shareholders, raising its dividend for 9 consecutive years and maintaining dividend payments for 54 consecutive years. This commitment to shareholders is further bolstered by the company's ability to sufficiently cover interest payments with its cash flows. Moreover, analysts have revised their earnings upwards for the upcoming period, suggesting confidence in Eli Lilly's financial prospects.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available, which include insights on Eli Lilly's valuation multiples and profitability forecasts. With the company's next earnings date scheduled for October 30, 2024, interested parties can find further guidance and a comprehensive set of tips on the InvestingPro platform.
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