Wegovy Maker Novo Nordisk Bets Big On Talent, Ai Partnerships In India

The latest trading session saw Eli Lilly (LLY) ending at $910.69, denoting a -0.98% adjustment from its last day's close. This move lagged the S&P 500's daily loss of 0.21%. Meanwhile, the Dow lost 0.14%, and the Nasdaq, a tech-heavy index, lost 0.05%.

Shares of the drugmaker witnessed a loss of 0.12% over the previous month, beating the performance of the Medical sector with its loss of 3.28% and underperforming the S&P 500's gain of 5.94%.

The upcoming earnings release of Eli Lilly will be of great interest to investors. It is anticipated that the company will report an EPS of $4.54, marking a 4440% rise compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $12.17 billion, indicating a 28.16% upward movement from the same quarter last year.

LLY's full-year Zacks Consensus Estimates are calling for earnings of $16.49 per share and revenue of $46.33 billion. These results would represent year-over-year changes of +160.92% and +35.77%, respectively.

Investors should also note any recent changes to analyst estimates for Eli Lilly. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.02% upward. Right now, Eli Lilly possesses a Zacks Rank of #2 (Buy).

Investors should also note Eli Lilly's current valuation metrics, including its Forward P/E ratio of 55.76. This valuation marks a premium compared to its industry's average Forward P/E of 15.73.

Investors should also note that LLY has a PEG ratio of 2.79 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Large Cap Pharmaceuticals industry had an average PEG ratio of 1.65 as trading concluded yesterday.

The Large Cap Pharmaceuticals industry is part of the Medical sector. Currently, this industry holds a Zacks Industry Rank of 94, positioning it in the top 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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United States Senator Elizabeth Warren wrote a letter to the Federal Trade Commission’s chair, Lina Khan, urging to investigate Novo Nordisk A/S proposed $16.5 billion acquisition of contract development and manufacturing organization Catalent Inc thoroughly, amid growing concerns about potential antitrust violations.

Critics argue that this merger could increase Novo Nordisk’s control over producing vital GLP-1 receptor agonists, drugs used to treat diabetes and obesity. This could potentially drive up prices and limit competition.

Also Read: Novo Nordisk/AstraZeneca’s Manufacturing Partner Thermo Fisher Questioned Over Manufacturing Lapses.

Novo Nordisk already has a dominant 55% share of the booming GLP-1 market due to the success of its blockbuster drugs, Ozempic and Wegovy.

Catalent plays a key role in filling and packaging Novo Nordisk’s GLP-1 products, but it also works with Eli Lilly And Co , Novo Nordisk’s main competitor in the GLP-1 market, primarily through its tirzepatide-based drugs, Mounjaro and Zepbound.

The concern is that if Novo Nordisk acquires Catalent, it could gain unprecedented access to Eli Lilly’s production capacity, potentially allowing it to prioritize its drugs over its competitors.

The letter highlights that Novo Nordisk has faced scrutiny from the FTC. Earlier this year, the FTC warned Novo Nordisk for improperly listing patents related to its diabetes drugs in the FDA’s Orange Book.

This behavior, combined with the company’s current plans to acquire Catalent, raises concerns about Novo Nordisk’s ability to further hinder competition.

Over recent decades, the consolidation of the U.S. pharmaceutical industry has led to fewer dominant firms and higher drug prices. From 1995 to 2015, major pharmaceutical companies dropped from 60 to just 10, as large corporations increasingly controlled healthcare services, from insurance to pharmacies.

Novo Nordisk’s proposed acquisition of Catalent is considered part of this broader trend of vertical integration.

While Novo Nordisk claims it prioritizes patient access to diabetes medications, critics argue its actions suggest otherwise. The company recently discontinued Levemir, a long-acting insulin, the only option approved for use during pregnancy.

Although Novo Nordisk cited unfavorable formulary placement as the reason, the decision is seen as a way to reallocate production resources to its more profitable GLP-1 drugs.

Price Action: At last check Thursday, NVO stock was up 0.46% at $117.54, and CTLT stock was down 0.53% at $60.64.

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