There Will Be More Key Approvals
Eli Lilly, a leading company in the field of weight-loss medicine, has gained popularity, and its financial performance has been exceptional, surpassing the broader market. This year, the company achieved notable approvals for two treatments: Omvoh, used in ulcerative colitis, and Jaypirca, a cancer treatment. While these approvals were not the sole reason for Eli Lilly’s market success, they certainly contributed. However, the biotech’s upcoming launch of a highly promising new product, in addition to Jaypirca and Omvoh, further enhances its prospects.
Currently, Eli Lilly awaits the decision on its application for donanemab, an Alzheimer’s disease (AD) medicine. Should the company receive approval for donanemab, it would have a significant impact. Evaluate Pharma, a renowned research service, has identified donanemab as one of the industry’s most valuable R&D projects, projecting a net present value of $8.8 billion and estimated revenue of $2.1 billion by 2028. The approval of donanemab would undeniably boost Eli Lilly’s stock performance in the upcoming year.
Financial Results Could Strengthen
Eli Lilly has already delivered impressive earnings this year, fueling its overall success. With a 17% year-over-year revenue increase to $24.8 billion in the first nine months of the year, the company’s performance remains solid. However, there are compelling reasons to believe that Eli Lilly’s financial results could further improve in 2024.
Firstly, the newly approved treatments are poised to gain significant traction, thereby positively impacting the company’s financial performance.
Secondly, Eli Lilly will no longer face the adverse effects of its COVID-19 portfolio. In 2022, the company generated nearly $2 billion in sales from coronavirus antibodies, which were absent during the same period in 2023. The removal of this comparison will foster substantial year-over-year revenue growth.
Lastly, Eli Lilly recently received approval for Zepbound, a weight-loss medicine marketed as Mounjaro for diabetes patients. Although physicians had been prescribing it for obesity, its formal approval for this indication is expected to greatly increase prescriptions. Mounjaro/Zepbound has the potential to become one of the highest-selling medications in the industry, driving significant revenue growth for Eli Lilly.
Beyond the Next 12 Months
In addition to its current achievements, Eli Lilly continues to work on developing a potential once-weekly insulin product called insulin efsitora alfa. However, it is important to acknowledge the challenge of predicting market behavior over the next 12 months. While Eli Lilly’s short-term prospects appear promising, it is uncertain whether they will translate into strong stock-market performance, as witnessed this year. Nonetheless, the company’s long-term prospects remain exceptionally positive. Investors who choose to acquire shares now may enjoy substantial returns in five years or more, regardless of the stock price’s performance in 2024.