Research archive for LLY

The weather this morning in Joburg is the best it has been in months, so I'll keep my Musings short. There is an old market saying, "insiders sell for many reasons, but they only buy for one".

Yesterday, weight-loss drug maker Eli Lilly reported solid numbers before the opening bell, which easily beat expectations on all fronts. Revenue increased by 38% to $15.5 billion thanks to big volume growth from Zepbound and Mounjaro. Mounjaro, primarily marketed for diabetes, grew sales from $3.8 billion last quarter to $5.2 billion. Zepbound is the same formulation but is sold as a weight loss drug; that grew sales from $2.3 billion last quarter to $3.3 billion.

Obesity in children is rising. The 2017 South African income dynamics survey found 16% of children aged five to nine, and 22% of those aged 10 to 14, were overweight or obese. Almost ten years later those numbers are certainly higher.

Eli Lilly is the stock we've bought most actively in the last year, but its share price has been very choppy. Sales of their world-leading weight-loss drugs have been rising fast, but the market has not yet fully grasped their revenue potential.

Last Thursday, Eli Lilly's share price dropped 11%. The fall came after they reported mixed first-quarter numbers, and also an announcement from CVS that they were going to stock Novo Nordisk's Wegovy ahead of Eli Lilly's Zepbound. The share price drop was unfortunate, but it's still trading higher than it was in the middle of April.

Eli Lilly just took a big step forward in the weight-loss arms race with its new daily pill, orforglipron, showing promising results in a late-stage trial for Type 2 diabetes patients.

As you well know, we are big fans of Eli Lilly and their weight-loss drugs. I was astounded to see this map showing the obesity levels per state in America.

There have been some concerns around the Trump administration's treatment of big pharma, especially Robert F Kennedy, the recently appointed Secretary of Health and Human Services. Kennedy is a renowned sceptic about the drug industry and has spoken out against some vaccines. I'm not going to get into that debate here, but what I do know is that the current administration is very Pro-America.

We've been actively accumulating Eli Lilly shares for clients for the last 18 months. We are very bullish on the prospects for their market-leading weight-loss drugs. They also have a very good business making other drugs.

There is so much talk about Eli Lilly and their exciting weight-loss drugs that we often forget about all the other things happening under the hood. Last week they announced a $2.5 billion cash purchase of Scorpion Therapeutics.

Weight-loss drugs such as Ozempic and Zepound have been so effective that they are starting to impact the fashion industry. According to Vogue, secondhand marketplaces are experiencing a surge in the supply of plus-sized women's clothing.

For most of human history, food was very scarce. Advances in agriculture were painfully slow, so standards of living for the masses barely rose.

Eli Lilly reported quarterly results at the end of October that came up short of forecasts, causing its shares to slide over 10%. They have since recovered somewhat. Sales of the company's blockbuster diabetes and anti-obesity drugs, Mounjaro and Zepbound, fell short of very high revenue expectations. Mounjaro sales more than doubled to $3.11 billion and Zepbound sales were $1.26 billion, so they are not exactly battling.

Is there anything that weight-loss drugs can't do? Zepbound will now be used in a trial in the UK to see if it combats unemployment. Eli Lilly will invest £279 million ($364 million) to help tackle Britain's significant health challenges.

The FDA announced that shortages of Eli Lilly's diabetes and weight-loss drugs, Mounjaro and Zepbound, have been resolved after nearly two years. Eli Lilly made a similar announcement a few months ago, but it took some time for the regulator to agree. The drug maker has assured the watchdogs that production can now meet current and future US demand.