We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Eli Lilly (LLY) Stock Up 26.7% YTD: What's in Store for 2023?
Read MoreHide Full Article
Eli Lilly and Company (LLY - Free Report) stock has risen 26.7% this year so far compared with an increase of 4.7% for the industry.
Image Source: Zacks Investment Research
Here we discuss the factors that are driving Lilly’s stock higher and can keep the positive momentum alive in 2023.
Lilly’s revenue growth is being driven by higher demand for drugs like Trulicity, Taltz, and others. Its key growth products (like Trulicity, Taltz etc.) grew 17% in the third quarter and contributed nearly 70% to total revenues, excluding revenues from COVID-19 antibodies.
Importantly, Lilly expects to launch five new medicines by 2023 end, which could serve as catalysts to top-line growth through the decade.
Of these five, Mounjaro (tirzepatide), a dual GIP and GLP-1 receptor agonist (GIP/GLP-1 RA), was approved by the FDA in May. The drug showed impressive blood sugar reductions and weight loss in type II diabetes patients in phase III studies. Mounjaro was approved in Europe and Japan in the third quarter of 2022
The product is off to a solid start and is expected to be a key long-term top-line driver for Lilly as it has the potential to be approved for obesity and other diabetes-related diseases. Mounjaro recorded $187.3 million in revenues in the third quarter and $16.0 million in the second quarter. Lilly is working on improving manufacturing capacity for incretin to keep up with patient demand for Mounjaro, which is an incretin-based medicine. Mounjaro is in phase III studies for obesity (rolling submission expected to begin in 2022), obstructive sleep apnea and heart failure with preserved ejection fraction (HFpEF) and phase II in NASH.
Mounjaro is the first of the potentially five new medicines that Lilly plans to launch by the end of 2023.
The other four candidates for which Lilly has filed regulatory applications are donanemab for early Alzheimer's disease, pirtobrutinib for mantle cell lymphoma, mirikizumab for ulcerative colitis and lebrikizumab for atopic dermatitis.
Of all the five candidates, Mounjaro and donanemab have multi-billion-dollar sales potential.
Lilly has its share of issues like generic competition for several drugs, rising pricing pressure in the United States mainly on key drug, Trulicity, and price cuts in some international markets like China, Japan and Europe.
Its key drug Alimta’s vitamin regimen patent expired worldwide in June 2021 and generics were launched in Europe and Japan. In the United States, following the loss of patent and pediatric exclusivity in May 2022. Alimta sales have been declining rapidly now with multi-source generic entrants, following the loss of patent exclusivity in major markets, including the United States. The trend is expected to continue in 2023.
Lilly expects the initial revenues from the next wave of potential launches to be modest in 2023. In 2023, the company will see the full-year impact of Alimta's patent expiry in the United States. Lilly expects a low single-digit headwind from foreign exchange rates in 2023. Lilly does not expect COVID-19 antibodies to be a major driver for long-term growth for Lilly.
Costs incurred to expand manufacturing capacity and support the potential launch of multiple new products, inflation impact, and higher employee costs are expected to slow down operating margin expansion in 2023.
Nonetheless, Lilly is hopeful that its key products like Trulicity, Taltz, Jardiance and positive regulatory updates related to the potential five new products discussed above will keep driving the stock in 2023.
Some better-ranked stocks in the drugs/biotech sector are Vertex Pharmaceuticals (VRTX - Free Report) , Bayer (BAYRY - Free Report) , and Merck (MRK - Free Report) , all carrying a Zacks Rank #2 (Buy) at present.
Vertex Pharmaceuticals’ stock has risen 39% this year. Estimates for Vertex’s 2022 earnings have gone up from $14.21 to $14.61 per share, while those for 2023 have increased from $15.10 to $15.60 per share over the past 30 days.
Vertex has a four-quarter earnings surprise of 3.16%, on average.
Bayer’s stock is up 3.8% this year so far. Bayer’s earnings per share estimates for 2022 have increased from $2.02 per share to $2.03 per share over the past 30 days. Earnings of Bayer beat estimates in three of the last four quarters, the average surprise being 18.23%.
Merck’s earnings per share estimates for 2022 have increased from $7.31 per share to $7.38 per share, while that for 2023 have increased from $7.21 per share to $7.34 per share in the past 30 days. Merck’s stock is up 30.0% in the year-to-date period.
Merck beat earnings expectations in all the trailing four quarters. The company delivered a four-quarter earnings surprise of 16.07%, on average.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Eli Lilly (LLY) Stock Up 26.7% YTD: What's in Store for 2023?
Eli Lilly and Company (LLY - Free Report) stock has risen 26.7% this year so far compared with an increase of 4.7% for the industry.
Image Source: Zacks Investment Research
Here we discuss the factors that are driving Lilly’s stock higher and can keep the positive momentum alive in 2023.
Lilly’s revenue growth is being driven by higher demand for drugs like Trulicity, Taltz, and others. Its key growth products (like Trulicity, Taltz etc.) grew 17% in the third quarter and contributed nearly 70% to total revenues, excluding revenues from COVID-19 antibodies.
Importantly, Lilly expects to launch five new medicines by 2023 end, which could serve as catalysts to top-line growth through the decade.
Of these five, Mounjaro (tirzepatide), a dual GIP and GLP-1 receptor agonist (GIP/GLP-1 RA), was approved by the FDA in May. The drug showed impressive blood sugar reductions and weight loss in type II diabetes patients in phase III studies. Mounjaro was approved in Europe and Japan in the third quarter of 2022
The product is off to a solid start and is expected to be a key long-term top-line driver for Lilly as it has the potential to be approved for obesity and other diabetes-related diseases. Mounjaro recorded $187.3 million in revenues in the third quarter and $16.0 million in the second quarter. Lilly is working on improving manufacturing capacity for incretin to keep up with patient demand for Mounjaro, which is an incretin-based medicine. Mounjaro is in phase III studies for obesity (rolling submission expected to begin in 2022), obstructive sleep apnea and heart failure with preserved ejection fraction (HFpEF) and phase II in NASH.
Mounjaro is the first of the potentially five new medicines that Lilly plans to launch by the end of 2023.
The other four candidates for which Lilly has filed regulatory applications are donanemab for early Alzheimer's disease, pirtobrutinib for mantle cell lymphoma, mirikizumab for ulcerative colitis and lebrikizumab for atopic dermatitis.
Of all the five candidates, Mounjaro and donanemab have multi-billion-dollar sales potential.
Lilly has its share of issues like generic competition for several drugs, rising pricing pressure in the United States mainly on key drug, Trulicity, and price cuts in some international markets like China, Japan and Europe.
Its key drug Alimta’s vitamin regimen patent expired worldwide in June 2021 and generics were launched in Europe and Japan. In the United States, following the loss of patent and pediatric exclusivity in May 2022. Alimta sales have been declining rapidly now with multi-source generic entrants, following the loss of patent exclusivity in major markets, including the United States. The trend is expected to continue in 2023.
Lilly expects the initial revenues from the next wave of potential launches to be modest in 2023. In 2023, the company will see the full-year impact of Alimta's patent expiry in the United States. Lilly expects a low single-digit headwind from foreign exchange rates in 2023. Lilly does not expect COVID-19 antibodies to be a major driver for long-term growth for Lilly.
Costs incurred to expand manufacturing capacity and support the potential launch of multiple new products, inflation impact, and higher employee costs are expected to slow down operating margin expansion in 2023.
Nonetheless, Lilly is hopeful that its key products like Trulicity, Taltz, Jardiance and positive regulatory updates related to the potential five new products discussed above will keep driving the stock in 2023.
Zacks Rank & Stocks to Consider
Lilly currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the drugs/biotech sector are Vertex Pharmaceuticals (VRTX - Free Report) , Bayer (BAYRY - Free Report) , and Merck (MRK - Free Report) , all carrying a Zacks Rank #2 (Buy) at present.
Vertex Pharmaceuticals’ stock has risen 39% this year. Estimates for Vertex’s 2022 earnings have gone up from $14.21 to $14.61 per share, while those for 2023 have increased from $15.10 to $15.60 per share over the past 30 days.
Vertex has a four-quarter earnings surprise of 3.16%, on average.
Bayer’s stock is up 3.8% this year so far. Bayer’s earnings per share estimates for 2022 have increased from $2.02 per share to $2.03 per share over the past 30 days. Earnings of Bayer beat estimates in three of the last four quarters, the average surprise being 18.23%.
Merck’s earnings per share estimates for 2022 have increased from $7.31 per share to $7.38 per share, while that for 2023 have increased from $7.21 per share to $7.34 per share in the past 30 days. Merck’s stock is up 30.0% in the year-to-date period.
Merck beat earnings expectations in all the trailing four quarters. The company delivered a four-quarter earnings surprise of 16.07%, on average.