Eli Lilly stock yo-yoed recently after announcing the Food and Drug Administration has scheduled an advisory committee meeting on June 10 to discuss its Alzheimer's treatment, donanemab.
Like Biogen and Eisai's approved Alzheimer's treatment, Leqembi, donanemab works by removing built-up plaque in the brain known as beta amyloid. But that leads to swelling in the brain known as amyloid-related imaging abnormalities, or ARIA. Most of the time, the swelling is transient and asymptomatic.
Donanemab is better at removing beta amyloid, but also leads to higher rates of ARIA. Analysts say advisors could focus on the alternative dosing regimen for donanemab. Lilly has proposed patients stop receiving the drug once their brains are clear of beta amyloid. Leqembi is a chronic drug.
Meanwhile, investors are watching for Eli Lilly's next steps in obesity treatment. In the first quarter, sales of weight-loss drug Zepbound skyrocketed and topped Wall Street's projections. But sales of diabetes drugs Mounjaro and Trulicity missed forecasts. Lilly says it's boosting production this year and raised its sales outlook by $2 billion.
The company is also planning to ask the FDA to approve tirzepatide — the chemical backbone behind Zepbound and Mounjaro — for patients with obstructive sleep apnea. Patients who took tirzepatide had 55% to 63% fewer nighttime incidents, outperforming a placebo.
Lilly's next-generation efforts include a daily pill called orforglipron in patients with type 2 diabetes and obesity. Its next-generation drug targets three hormones and could stoke even further weight loss.
Eli Lilly also locked up its acquisition of Point Biopharma, an expert in radioligand treatments for cancer. The company ties a radioisotope to a molecule capable of finding cancer cells in the body. This allows the drug to deliver targeted radiation directly to the tumor, limiting the impact on healthy tissue.
So, is Eli Lilly stock a buy right now?
Eli Lilly Stock: Bullish Sales Growth
In the first quarter, Lilly earned an adjusted $2.58 per share on $8.77 billion in sales. Earnings grew 59% and beat forecasts for $2.47. Sales climbed 26%, but lagged calls for $8.94 billion, according to FactSet.
Mounjaro and Trulicity were partly to blame for the light sales quarter. Mounjaro brought in $1.81 billion in sales, but missed expectations for $2.15 billion. Trulicity, another diabetes treatment, had $1.46 billion in first-quarter sales, down 26% and below the $1.63 billion Street forecast.
Further, sales of breast cancer drug Verzenio and diabetes med Jardiance came up short.
But Zepbound sales shined, bringing in $517.4 million, whereas analysts expected just $373 million. Leerink Partners analyst David Risinger notes two-thirds of commercially covered patients had access to the weight-loss drug as of April 1, up from a third on Feb. 1.
Bullish first-quarter sales and earnings line up with savvy investing advice, which suggests investors look for companies with recent growth of at least 20% to 25%. The second quarter could also meet that benchmark, with earnings expected to grow 32% to $2.78 per share, and sales projected to rise 20% to $9.99 billion.
LLY Stock: What Are Eli Lilly Yearly Earnings?
In 2023, Eli Lilly earned $6.32 a share, minus some items, on $34.12 billion in sales. Profit fell 20.4% but topped expectations for $6.23. Sales jumped 20% and came in above forecasts for $33.65 billion, according to FactSet.
Notably, Mounjaro generated $5.16 billion in sales, jetting higher from $482.5 million in 2022 sales. Revenue from Verzenio and Jardiance came in at a respective $3.86 billion and $2.74 billion. Sales of Verzenio surged 56%, while Jardiance sales rocketed 33%.
After the first-quarter report, Eli Lilly guided to $42.4 billion to $43.6 billion in 2024 sales. Lilly plans to bolster its production of diabetes and weight-loss drugs later this year. The company also calls for adjusted earnings of $13.50 to $14 a share. Both measures topped analysts' forecasts.
Wall Street expects Mounjaro to bring in $10.38 billion in sales this year, growing more than 101% year over year. Zepbound is projected to generate $4.01 billion in sales. In 2029, analysts expect the two drugs to bring in $24.05 billion and $16.29 billion in sales, respectively.
LLY stock analysts also expect Alzheimer's drug donanemab to bring in $58 million in 2024 sales and reaching blockbuster status with $1.05 billion in 2026.
Meanwhile, sales from blockbuster insulins Humalog and Humulin are expected to fall now that Lilly has announced price cuts. Sales of generics-facing Alimta, a cancer drug, are also forecast to drop.
Eli Lilly Stock Analysis
Eli Lilly stock briefly broke out of a double-bottom base with a buy point at 793.67, according to MarketSurge. Shares later fell as much as 8% below that entry on May 3. Savvy investors are encouraged to cut their losses when a stock falls 7% to 8% below a stock's buy point.
Shares recently vaulted over their 50-day line. Eli Lilly stock is also well above its 200-day moving average.
Eli Lilly stock has a Relative Strength Rating of 88 out of a best-possible 99, IBD Digital shows. This puts shares in the top 12% of all stocks when it comes to 12-month performance. Shares have a Composite Rating of 95, a measure of fundamental and technical metrics.
Alzheimer's Treatment News Hits LLY Stock
Eli Lilly is angling for FDA approval of donanemab, a potential Alzheimer's treatment that removes built-up plaque in the brain known as beta amyloid. Beta amyloid is a hallmark of the disease, though experts don't necessarily agree that it's the cause.
The FDA said it plans to hold an advisory committee meeting on June 10 to discuss the effectiveness and safety of donanemab in the study called Trailblazer-ALZ 2. The decision effectively pushes back the approval decision, which was expected in the first quarter.
Biogen's Leqembi gained full approval for Alzheimer's treatment based on its ability to remove amyloid. In mid-July, Lilly said patients who received its drug for 18 months had a 22%-29% slower decline in cognition than placebo recipients.
The results were even stronger in patients with medium levels of a protein called tau in their brains. Donanemab led to a 35%-36% slower cognitive decline compared with a placebo.
Eli Lilly Stock Investors Watch Weight-Loss Drugs
Investors in Eli Lilly stock are waiting for more from Lilly's efforts in obesity treatment.
In December, Lilly said patients who took Zepbound for eight months lost an average of 20.9% of their body weight. But when a group of patients switch to a placebo, they regained 14% of their weight over a year. Those who stayed on Zepbound lost an additional 5.5% of their weight.
In another analysis of electronic health records, patients who took tirzepatide for a year were three times more likely than recipients of Novo Nordisk's rival drug, semaglutide, to lose at least 15% of their body weight.Novo sells semaglutide as diabetes treatments known as Ozempic and Rybelsus, and as a weight-loss drug called Wegovy.
Semaglutide recipients were also 2.6 times and 1.8 times more likely to lose at least 10% and 5% of their weight, respectively.
Lilly's next-generation approach called retatrutide adds in a third target called the glucagon receptor, and could be an eventual boon for Eli Lilly stock. In theory, this could lead to improved weight loss. Over 24 weeks, overweight patients or those with obesity who received retatrutide lost up to 17.5% of their weight. At 48 weeks, patients lost up to 24.2% of their body weight.
Lilly is also testing Mounjaro's ability to improve morbidity and mortality in patients with obesity or those who are overweight. The results of that study are expected in late 2027.
Lilly just acquired Versanis Bio, which has a drug that could improve fat loss while limiting muscle mass loss associated with GLP-1 drugs. Further, Lilly entered into a collaboration with Verve Therapeutics to test three potential gene-editing approaches to permanently lowering cholesterol.
Less promisingly, on April 10, Lilly said patients who received its diabetes drug, Jardiance, after having a heart attack only had a 10% reduced risk of heart failure or death over 26 months. The results didn't meet statistical significance.
Is LLY Stock A Buy Right Now?
Lilly stock isn't currently a buy. Shares just surged above their 50-day line — a promising sign. But the stock broke out and then retreated into sell-zone territory.
Lilly also reported strong first-quarter sales and earnings growth. But that sales growth lagged Street expectations, though earnings easily beat.
It will be key to watch how the markets for weight-loss drugs and Alzheimer's treatments unfold.
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Follow Allison Gatlin on Twitter at @IBD_AGatlin.
