4. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 100
Eli Lilly and Company (NYSE:LLY) is an American pharma company headquartered in Indiana. The company is widely recognized for its development of medications, including the antidepressants Prozac and Cymbalta, and diabetes treatments like Humalog and Trulicity.
It was the first company to mass-produce the polio vaccine and human insulin using recombinant DNA technology. Its recent focus includes diabetes, obesity, Alzheimer’s, and autoimmune diseases. The company ranks at 4 on our list of best momentum stocks.
On September 13, Eli Lilly (NYSE:LLY) announced that the U.S. Food and Drug Administration has approved EBGLYS (lebrikizumab-lbkz) for treating moderate-to-severe atopic dermatitis in adults and children aged 12 and older who do not respond well to topical treatments. The new biologic medication offers a significant treatment option for patients struggling with severe eczema symptoms, such as persistent itching and skin irritation.
Recent studies reveal that EBGLYSS provides long-lasting disease management for over 80% of adults and adolescents suffering from moderate-to-severe atopic dermatitis. The findings come from the extended ADjoin study, which tracked participants for up to three years.
About 87% of patients were able to achieve and sustain clear or nearly clear skin without relying on high-potency topical corticosteroids or systemic therapies during the study.
Furthermore, the safety profile observed after three years was consistent with earlier two-year results, with the majority of reported adverse effects categorized as mild or moderate.
Eli Lilly (NYSE:LLY) also announced a significant $4.5 billion investment to establish the Lilly Medicine Foundry in Lebanon, Indiana, aimed at advancing drug manufacturing and development. The facility will integrate research and manufacturing processes, which will improve the company’s capacity to produce clinical trial medicines while exploring new production techniques.
The project will generate approximately 400 high-skilled jobs and strengthen the company’s commitment to Indiana, where it has invested over $13 billion. The state will provide infrastructure support and economic incentives to facilitate this initiative.
On October 3, TipRanks reported that Deutsche Bank analyst James Shin reaffirmed a Buy rating for Eli Lilly (NYSE:LLY) with a price target of $1,025. He highlighted the resolution of the Tirzepatide supply shortage, classified by the FDA as “resolved,” which is expected to lead to an increase in shipments in the latter half of 2024.
The increase aligns with strong market demand, supported by data from the American Society of Health-System Pharmacists and IQVIA. Shin also pointed to strong sales growth for the company’s Mounjaro and Zepbound drugs, which are contributing positively to revenue. With supply issues resolved, the focus shifts to a more fundamental assessment of Eli Lilly’s (NYSE:LLY) growth potential, which improves investor confidence in the company’s future performance.
PGIM Jennison Health Sciences Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its Q2 2024 investor letter:
“Eli Lilly and Company (NYSE:LLY) is a diversified biopharmaceutical company with core franchises in Diabetes, Obesity, Immunology, Neurodegeneration, and Oncology. The company is one of the two global leaders in diabetes with blockbuster products in Trulicity and recently launched Mounjaro (tirzepatide) to serve this large underserved market. To date, the Mounjaro launch is the strongest for any diabetes drug ever launched, which we attribute to off label usage in the obesity indication as well as on label use in diabetes. We believe the tirzepatide (the generic name for Mounjaro) franchise is also uniquely positioned to grow substantially from here thanks to its recent approval for obesity. To that note, in late 2023, Eli Lilly received approval for tirzepatide in obesity and is commercializing it for obesity under a new brand name, Zepbound. While still early in the launch, uptake has been extremely strong, exceeding that of both Wegovy and Mounjaro at the same timepoint in their launches. While Alzheimer’s Disease has been a tough market for drug developers, Eli Lilly has breakthrough designation from the food and drug administration (FDA) for donanemab and recently presented Phase III pivotal trial data that positions donanemab as the most efficacious drug in the class. In June, the FDA advisory committee voted unanimously in favor of donanemab as an effective treatment where the benefits outweigh the risks, praising the therapy as innovative. Donanemab was then approved under the brand name Kisunla in early July. Eli Lilly also has exciting franchises in dermatology, immunology, and oncology that are starting to add meaningfully to growth. With a proven history of strong commercial execution and one of the highest research and development (R&D) success rates in the industry, we see opportunity for continued success. With a lack of meaningful patent expirations for the rest of the decade. Eli Lilly is uniquely positioned amongst its larger-cap peers. Recent positive performance has been driven by the continued strong growth of Mounjaro and Zepbound, which led to a big guidance raise on the 1Q call, an unusual action for Eli Lilly this early in the year, which speaks to their confidence in the strong trends they are seeing.”
