Wall Street is buzzing about Eli Lilly and Company (LLY), touted as a top pick in Biopharma analysis by BofA Securities. The company has skyrocketed with a staggering year-to-date growth of +29%, dwarfing the DRG index’s +10%.
Eli Lilly’s stellar performance in the biopharma sector is credited to exceptional revenue expansion, widening margins, and a robust pipeline that outshines its competitors.
BofA Securities has upped its price target for Eli Lilly to $1000 from $800, acknowledging untapped potential in areas like heart disease, obstructive sleep apnea, and liver conditions. The inclusion of the next-gen GLP-1 oral, Orforglipron, showcases further confidence in the company’s trajectory.
In terms of competition, Eli Lilly boasts a formidable commercial moat alongside Novo Nordisk A/S (NVO) in the incretin space. Analysts note a scarcity of manufacturing capacity as a key component fortifying these companies’ competitive positions.
With the recent expansion of tirzepatide into weight loss indications, Eli Lilly’s sales are projected to soar, potentially hitting $60 billion by 2030, a substantial increase from $15 billion in 2024.
Adding upcoming assets like the phase 3 oral Orforglipron and the GGG agonist Retatrutide, global sales predictions for these novel products exceed $80 billion by 2030. Both Eli Lilly and Novo Nordisk are ramping up their production to meet skyrocketing demand, reassuring investors and patients alike.
To tackle challenges arising from limited availability of certain drug doses, Eli Lilly has doubled its production for incretin drugs, with plans for further expansion in the latter half of the year, aiming for a 1.5-fold increase compared to 2023’s second half production.
Price Action: LLY shares surged by 3.66%, landing at $781.29 at Friday’s closing bell.
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