On Wednesday the Food and Drug Administration approved Mounjaro from Lilly, as an obesity drug, after clinical trials showed that patients lost an average of 18% of their body weight. The drug will be marketed as Zepbound in the obesity market. This puts Lilly into direct competition with the wildly popular Wegovy weight-loss drug from Novo Nordisk (NVO)
This week’s Quick Pick is Eli Lilly (NYSE: LLY). The worldwide explosion in diabetes has increased the demand for medicine to prevent the illness from advancing from Type 2 to Type 1 diabetes. In developing these drugs, it’s become clear these Type 2 diabetes prescriptions have also excellent potential for weight loss. Novo Nordisk’s semaglutide drug, the market leader, has been FDA approved for both uses and is marketed as Ozempic for diabetes and Wegovy for weight loss. Eli Lilly’s competitor drug, Mounjaro, is already approved by the FDA for Type 2 diabetes. That drug is likely to be approved for weight loss as well and looks like it may work even better than Novo Nordisk’s Wegovy. illy’s second diabetes drug, Retatrutide, is still in the pipeline and just reported Phase clinical results showed a 24% loss of body weight after 11 months. Th drug still has to go into Phase III trials but it is likely to be approved. Lilly’s stock has a 1% yield and is trading at a trailing 12 month PE of 72, so this stock is not cheap. I’ve had this stock in my Jubak Picks portfolio since November 20, 2022 and it’s up about 34% since then, but I believe we can expect another 20% to the upside with the approval of their drugs in the pipeline. The relatively low risk with a likely 20% return makes this a very attractive stock to me.
Shares of Eli Lilly (LLY), a pick for my Jubak Pick’s Portfolio in a post yesterday, are up 8.89% today as of noon New York time, September 28, on news that an experimental Alzheimer’s drug from Biogen (BIIB) and Japan’s Eisai(ESALY) slowed cognitive and functional decline by 27 percent in a clinical trial. Today shares of Biogen are up 38.07% and shares of Eisai are up 62.6% on the news. Why the pop in Lilly? As I explained in my post yesterday, Lilly has its own Alzheimer’s drug in development and positive results out of Biogen/Eisai are thought to be a positive for that drug too.