- Eli Lilly and Co LLY shares have appreciated 27 percent in the last one year, but are down 4 percent in the last three months.
- Credit Suisse’s Vamil Diwan upgraded the rating on the company from Neutral to Outperform, while raising the price target from $89 to $105.
- The company’s strength lies in its diverse pipeline of products, many of which are underappreciated by investors, Diwan said.
Analyst Vamil Diwan noted that although Eli Lily’s shares have outperformed both the S&P and the peer group, the probability of further outperformance in the near future is high. The upside is expected to be driven by an increase in Jardiance sales following the impressive EMPA-REG OUTCOME results.
Awareness among physicians, especially endocrinologists, of the mortality benefit demonstrated by Jardiance in EMPA-REG OUTCOME is expected to result in increased use of the drug in the near term as well, Diwan said. He added that this could get a boost in 2017 and thereafter.
Eli Lily’s strength lies in its diverse and relatively de-risked mid-late stage product pipeline, which comprises of several underappreciated, albeit attractive opportunities, the Credit Suisse report stated. These include baricitinib for rheumatoid arthritis, ixekizumab for psoriasis, anti-CGRP for migraine and abemaciclib for Oncology.
Diwan commented, however, that investors have been focusing on Eli Lily’s two potentially transformative, but high-risk product options of solanezumab for Alzheimer’s and evacetrapib for cholesterol.
“We are cautiously optimistic on both but believe investors are still under appreciating several other attractive assets that at this point are relatively de-risked based on data LLY or competitors have released,” the report added.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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