Medicare Coverage to Expand Access to Eli Lilly's Weight-Loss Pill
Written by Emily J. Thompson, Senior Investment Analyst
Source: Benzinga
- Medicare Coverage Expansion: Medicare's upcoming coverage of obesity treatments could potentially qualify 20 to 30 million patients for Eli Lilly's experimental weight-loss pill, orforglipron, significantly enhancing drug accessibility and usage rates.
- Strong Market Potential: Eli Lilly anticipates volume growth in the second half of 2026 as more patients gain coverage, although initial drug pricing agreements will lead to a decrease in costs, the long-term outlook suggests a boost in market demand.
- Intensified Competition: Novo Nordisk ramped up advertising for its GLP-1 drugs in 2025, spending approximately $316 million on Wegovy and $169 million on Ozempic, reflecting increases of 54% and 44% from 2024, indicating heightened market competition.
- Financial Performance: Eli Lilly's stock closed at $1,037.15 on Friday, up 1.27%, but edged down 0.12% in after-hours trading, indicating short-term market volatility.
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Analyst Views on LLY
Wall Street analysts forecast LLY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for LLY is 1192 USD with a low forecast of 950.00 USD and a high forecast of 1500 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
20 Analyst Rating
18 Buy
2 Hold
0 Sell
Strong Buy
Current: 1024.140
Low
950.00
Averages
1192
High
1500
Current: 1024.140
Low
950.00
Averages
1192
High
1500
About LLY
Eli Lilly and Company is a medicine company, which discovers, develops, manufactures, markets, and sells pharmaceutical products worldwide. Its cardiometabolic health products include Basaglar; Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, and others; Humulin, Humulin 70/30, and others; Jardiance; Mounjaro; Trulicity; Zepbound; VERVE-102; VERVE-201, and VERVE-301. Its oncology products include Cyramza, Erbitux, Tyvyt, and Verzenio. Its immunology products include Ebglyss, Olumiant, Omvoh, and Taltz. Its neuroscience products include Emgality and Kisunla. The Company is also engaged in radiopharmaceutical discovery, development, and manufacturing efforts, and clinical and pre-clinical radioligand therapies in development for the treatment of cancer. It is also developing an oral small molecule inhibitor of a4b7 integrin for inflammatory bowel disease (IBD). It is evaluating its novel gene therapy candidate, ixoberogene soroparvovec.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Eli Lilly's Earnings Report Outlook for 2025
- Earnings Release Date: Eli Lilly is set to report its Q4 and full-year 2025 earnings on February 4, and while it has shown strong performance in recent years, earnings season can sometimes surprise investors, leading to stock price volatility.
- Historical Stock Reactions: The stock's response to recent earnings has been mixed; after strong Q3 results and positive guidance, the stock rose, yet it fell sharply after solid Q2 performance due to disappointing phase 3 clinical trial data, indicating uncertainty in market reactions.
- Market Expectations and Challenges: With a current P/E ratio of 32.5, significantly above the healthcare average of 18.6, Eli Lilly will need to deliver much better-than-expected revenue growth and strong guidance, particularly related to clinical data for its diabetes drug tirzepatide, to drive stock price increases.
- Long-term Investment Outlook: Although short-term stock movements are unpredictable, Eli Lilly remains a leader in the rapidly growing weight management market, planning to launch new products orforglipron and retatrutide in the next two years, and with a dividend yield of 0.6% and a doubled dividend over five years, it presents a compelling long-term investment opportunity.
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EU Drug Regulator Rejects Mounjaro for Heart Failure Indication
- Indication Rejection: The European Medicines Agency (EMA) declined Eli Lilly's application to expand Mounjaro (tirzepatide) for heart failure, indicating challenges in market expansion for the drug in this therapeutic area.
- Current Use Confirmation: Mounjaro is currently utilized in the EU for weight management in obese or overweight individuals, combined with diet and exercise, demonstrating its effectiveness under existing indications.
- Label Update Approved: Despite the rejection for heart failure, the EMA agreed to update Mounjaro's label to include relevant data supporting the HFpEF indication application, potentially aiding future marketing efforts.
- Market Impact Assessment: This rejection may negatively affect Eli Lilly's market expectations, particularly as competition intensifies in the heart failure treatment space, potentially leading to decreased investor confidence in the company's future growth.
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