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Hype Asset of the Day | March 28, 2022




Eli Lilly (LLY)


Eli Lilly and Company is a US-based pharmaceutical company that has been operating since 1876. It’s been one of the foremost producers of diabetes drugs for a number of years, with work to develop new treatments for the ailment affecting around 10.5% of Americans still ongoing. Outside of diabetic medication, Eli Lilly develops a wide variety of drugs designed to treat illnesses of all kinds, with one of their most commonly prescribed medications being the antidepressant Prozac. Over the past day, mentions of this trending stock are up by 100%, with the share price of Eli Lilly is floating around $289, setting YTD highs.


Positives

  • Pharmaceutical drugs are patent protected for 20 years, after this period generic versions are allowed to be created. Because of this, pharmaceutical companies need to have a solid lineup of drugs in the works, luckily, Eli Lilly has exactly that.

  • Tirzepatide is one of Eli Lilly’s most existing developments. It’s a medication designed to reduce blood sugar levels and body weight, used for treating diabetes. It’s currently awaiting FDA approval but if granted, things will likely heat up for Eli Lilly as it's been valued at an estimated $22.1 billion.

  • Eli Lilly’s financials seem promising with revenue growing by 15% over 2021.

  • Another drug in development by Eli Lilly is Mirikizumab. Used to treat UC, it’s showing promising results with 45.5% of treated patients having clear symptoms at 12 weeks vs 27.9% who were given a placebo.

  • Should Mirikizumab’s development and rollout go as planned, Eli Lilly could capture an 8% share of the market (around 16,000 patients). At an annual net price of $50,000 per customer, this would give Mirikizumab an insane $800 million earning potential.


Negatives

  • Eli Lilly is currently trading at a profit earnings ratio of around 33 times. Compared to similar companies in the industry, Eli Lilly’s valuation is fairly high.

  • US regulators shot down Eli Lilly’s attempt to bring a lung cancer drug developed in conjunction with a Chinese partner to market, citing the need for a more diversified test base. Analysts predict Eli Lilly could end up shelving the drug due to steep costs.

Hype Asset of the Day - Conclusion


Overall, Eli Lilly and Company is an attractive stock with a ton of potential. While it’s true a lot of the company’s value is tied to FDA approval of a few upcoming drugs, even if they’re rejected Eli Lilly has enough in the pipeline to bolster prices. While nobody can predict if a particular drug will be granted FDA approval ahead of time, with Mirikizumab being the highest valued pharmaceutical project, things certainly seem bright. If you want to find more trending stocks or learn more about the services offered by HypeIndex, you can check out our FAQ page or premium plans.


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