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- LLY is up nicely YTD.
- That is outpacing DRG and DIA.
- And it is happening while revenue declines!
ModernGraham Quarterly Valuation Of Eli Lilly & Co.
- LLY is suitable for Enterprising Investors following the ModernGraham approach.
- According to the ModernGraham valuation model, the company is fairly valued at the present time.
- The market is implying 4.85% earnings growth over the next 7-10 years, within a margin of safety relative to the rate the company has seen in recent years.
2 Reasons Why Eli Lilly's New Diabetes Drug Might Not Become A Blockbuster
- Eli Lilly’s once-a-week GLP-1 agonist has been approved by the FDA.
- The drug has been found to be non-inferior to Victoza, which dominates the GLP-1 market.
- Although Eli Lilly’s drug is promising, a crowded market and safety concerns will likely mean that it will not reach full potential.
- Recently, Eli Lilly and Boehringer Ingelheim received a positive opinion from the European Medicines Agency for its insulin glargine, Abasria, for the treatment of diabetes.
- It's the first copycat of Sanofi's blockbuster Lantus, which raked in $7.8 billion in global sales last year.
- Sanofi's European patent will expire in May next year.
- Diabetes is a large and growing market and it is expected Abasria will do quite well upon authorization.
- Eli Lilly also plans to file for its once-daily insulin injection, known as Peglispro, in the U.S. in the near future.
- The patent expiration of two of Eli Lilly's blockbuster drugs have strangled the company's recent-quarter performance.
- The company's diabetes pipeline has many blockbuster drugs that are materializing in the massively growing diabetes market.
- Eli Lilly's acquisition of Novartis's animal healthcare segment will result in $200 million financial synergies per year, and will also give Eli Lilly control over its projects.
- Eli Lilly's recently approved cancer drug Cyramza has the potential to generate around $1 billion in annual sales.
Eli Lilly: Strong Future Prospects Will Restore The Company's Financials
- Patent expiries of Cymbalta and Evista have strangled Eli Lilly’s quarterly performance this time. Generic competition has hit the company quite hard. Net margin has also shrinked by 5.5%.
- The company had received the authorization and orphan drug status for Cyramza for the treatment of patients with advanced or metastatic gastric cancer in the US.
- Eli Lilly has also received a positive opinion from European Medicines Agency for its insulin glargine, Abasria, for the treatment of diabetes.
- The company has also partnered with Immunocare Limited for developing T-cell immunotheraperies.
- It is an Undervalued stock with a dividend yield of 3.2%.
2 Stocks With Million Dollar Insider Purchases In 2014
- Air Products and Chemicals underperformed their competitors for years, but with an activist investor and a new CEO profitability will improve.
- Eli Lilly will start to grow revenues and earnings in 2015 after a fall in revenue and earnings due to patent expirations for branded prescription drugs.
- An insider from each company has purchased at least $1 million in shares of their respective company in 2014.
- The company's earnings will fall in 2014 and rise again in 2015 as it works through the major portion of its patent cliff.
- The company is relying on its animal health division to smooth out its earnings while its pharmaceutical earnings recover.
- The company is rewarding its shareholders with an over 3 percent dividend while it moves its new drugs towards the approval process.
- A $1 million insider purchase in 2014 is a positive sign that Eli Lilly shares will rise further.
Does The Eli Lilly Whisper Number Indicate Investor Confidence?
- The whisper number is $0.64, one cent behind the analysts' estimate.
- Eli Lilly has a 74% positive surprise history (having topped the whisper in 23 of the 31 earnings reports for which we have data).
- The overall average post earnings price move is "opposite" (beat the whisper number and see weakness, miss and see strength) when the company reports earnings.
- Eli Lilly has a rich R&D pipeline, with a current active focus on diabetes which has a growing market in the US and internationally.
- The recent research results of Dulaglutide prove the company’s constant efforts to launch innovative drugs.
- Strong acquisitions in the animal health segment have helped the company move the ladder of success at a faster pace.
- Following the intended takeover, Eli Lilly has become the second largest animal health player by revenue.
- In light of the efforts put in by Eli Lilly, it has bright future prospects.
Eli Lilly: Evaluating Dividend Stocks As An Alternative To Bonds
- LLY is among stocks with a high yield and low volatility suitable as an alternative to bonds.
- LLY's risk to key revenue streams result in an unappealing valuation for bond refugees.
- LLY's dividend stability is unattractive given near-term earnings pressure will likely keep the dividend in check and dividend safety measures at elevated levels.
- Eli Lilly showed revenue growth over the past year of around 2 percent.
- Key revenue driver Cymbalta's patent expired in late 2013 giving way to further competition.
- A 3 billion dollar penalty was recently enforced because of damages over a diabetes medicine.
- Eli Lilly faced headwinds due to its lackluster pipeline and significant patent expirations in consecutive years.
- Eli Lilly is now striving to turn around and regain its former lustrous performance on the basis of new drugs.
- Eli Lilly’s attempt to build on its diabetes portfolio will act as a catalyst for the company but may not completely replace the lost sales due to generic competition.
- The company’s lung cancer treatment drug seems to be another attractive opportunity to rule the market because it has enough room for growth.
- Eli Lilly meeting patent expiration with acquisitions and aggressive perusal of pipeline.
- Boosts animal division by acquiring German poultry vaccine company.
- Results of AWARD 6 trials establish shows once-weekly diabetes drug, Dulaglutide as good as same class Novo Nordisk drug, Victoza.
- Ramucirumab for lung cancer meets primary endpoint in Phase III trial.
- Rejection of empagliflozin type 2 diabetes SGLT2 inhibitor drug on technical grounds, not due to safety and efficacy.
Pharma Strength Expected To Continue With Eli Lilly
Mon, May. 12, 9:44 AM
- Eli Lilly's (LLY +0.7%) Basal Insulin Peglispro treatment for Type 2 Diabetes was more effective than Sanofi's (SNY +1.5%) blockbuster drug Lantus in cutting blood-sugar levels in three Phase III studies. Lilly's treatment also led to less weight gain.
- The company plans to file for U.S. and EU approval of the once-a-day treatment by the end of Q1 next year. (PR)
Mon, May. 5, 2:16 PM
Wed, Apr. 30, 7:36 AM
- Reuters reports that the French pharmaceutical firm (SNY) is working with Evercore partners to find a buyer for a portfolio of mature drugs that include treatments for high blood pressure and cardio-metabolic diseases.
- The businesses, which generate ~$3.7B in annual sales, should fetch between $7B and $8B.
- Generic firms or specialty pharma companies are likely acquirers.
- Sanofi's initiative is consistent with other members of big pharma who want to shed smaller, less profitable and/or non-core businesses in order to focus on their principal growth drivers.
- (JNJ) (MRK) (PFE) (GSK) (LLY) (NVS) (AZN)
Thu, Apr. 24, 8:45 AM
- Total revenue: $4.68B (-16%), net income: $727.9M (-53%), EPS: $0.68 (-52%).
- Revenue and earnings declines due to U.S. patent expirations of Cymbalta and Evista. The 16% revenue decline was due to 8% lower volume, 6% price erosion and 2% unfavorable foreign exchange movements.
- Gross margin was $3.46B (-22%).
- Updated 2014 guidance:
- EPS: $2.70 - $2.78
- Revenues: $19.4B - $20B.
- Gross margin: 73%.
- Net income: at least $2.9B.
- CF Ops: at least $4B.
- CAPEX: $1.3B
- Dividends: $2.1B.
Thu, Apr. 24, 6:31 AM
Thu, Apr. 24, 12:05 AM
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Wed, Apr. 23, 5:30 PM
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Tue, Apr. 22, 12:50 PM
- Eli Lilly's (LLY -0.9%) all-cash $5.4B acquisition of Novartis (NVS +1.4%) Animal Health makes Elanco the world's second-largest animal health company.
- The purchase will be made with $3.4B of cash on hand and $2B in debt.
- Lilly expects to wring out $200M (~10%) in annual cost savings within three years of the expected Q1 2015 close.
- It forecasts EBIT yield in the mid-20% range by 2018.
- The transaction will be accretive to earnings on a cash basis starting in 2016, exclusive of integration costs.
- Management does not expect the deal to change the firm's dividend policy or current share repurchase program.
Tue, Apr. 22, 2:11 AM
- Novartis (NVS) has agreed to exchange certain assets with GlaxoSmithKline (GSK) and it is selling its animal-health division to Eli Lilly (LLY) for around $5.4B.
- Novartis will buy GSK's oncology products for an initial $14.5B and up to $1.5B in development milestones. The Swiss company will also sell its vaccines business to its U.K. rival for $5.25B upfront and as much as $1.8B in milestones, as well as royalties. The latter deal doesn't include Novartis' flu business, which the company plans to sell separately.
- Novartis will also combine its over-the-counter operations with GSK Consumer Healthcare in a joint venture in which Novartis will own 36.5%.
- Eli Lilly will fold Novartis' animal-health unit into its Elanco business, creating the second-largest company in the sector in terms of global revenue.
- Novartis PR, Eli Lilly PR
Mon, Apr. 21, 5:16 PM
- The FDA approves Eli Lilly's (LLY) Cyramza (ramucirumab) for advanced stomach cancer and gastroesophogeal junction adenocarcinoma. The product is an angiogenesis inhibitor that blocks the blood supply to tumors.
- According to the National Cancer Institute over 22K people will be diagnosed with stomach cancer this year. The mortality rate is ~50%.
Mon, Apr. 14, 9:20 AM
- The FDA accepts the NDA filed by Boehringer Ingelheim Pharmaceuticals and Eli Lilly (LLY) for the combo tablet of empagliflozin and Tradjenta (linagliptin) for the treatment of Type 2 diabetes in adults.
- The product offers the mechanisms of a sodium glucose co-transporter-2 (SGLT2) and a dipeptidyl peptidase-4 (DPP-4) inhibitor in a single tablet.
- SGLT2 inhibitors remove excess glucose through the urine by blocking its re-absorption in the kidney. DPP-4 inhibitors work by increasing hormones that stimulate the pancreas to produce more insulin and stimulate the liver to produce less glucose.
Thu, Apr. 10, 9:32 AM
- In its recent healthcare budget, French lawmakers introduced a measure that will allow pharmacists to substitute generics for prescribed brand-name biotech drugs. This has rattled the industry since France is Europe's #2 pharmaceutical market behind Germany.
- A decree must be passed before it becomes effective.
- France is the first European country to pursue biologic substitution. Big Pharma fears a domino effect if it is successful despite the heretofore slow uptake of biosimilars.
- The initiative applies only to patients starting a new course of treatment. Doctors will still retain the ability to demand the branded product.
- Unsurprisingly, Big Pharma is upset at not being consulted prior to the law's passage.
- Some analysts believe France could save up to $1.4B by 2020 by using generics.
- Substitutions only apply to retail pharmacies. 40% of biotech prescriptions are filled in hospitals.
- (RHHBY) (AMGN) (NVS) (SNY) (LLY) (PFE) (BMY) (MRK) (GSK) (JNJ) (HSP) (ABBV) (AZN) (BAYRY)
Tue, Apr. 8, 3:07 AM
- A jury has ordered Japan's Takeda (TKPYY) to pay $6B and Eli Lilly (LLY) $3B in punitive damages over allegations that they hid the cancer risks associated with the diabetes therapy Actos.
- However, Eli Lilly could be off the hook, as Takeda agreed to indemnify Lilly for any legal liability connected to Actos.
- In addition, the award is likely to be cut on appeal, as the Supreme Court has set limits on punitive verdicts.
- In two previous cases, judges quashed multi-million dollar awards against Actos.
- Notwithstanding, Takeda's shares slumped 5.2% in Tokyo.
Mon, Apr. 7, 7:49 AM
- Eli Lilly's (LLY) Bemaciclib drug aided 61% of participants in a Phase I trial of 132 patients with metastatic, hormone-sensitive breast cancer.
- The size of tumors shrunk by 30% or didn't increase for 24 weeks.
- Progression-free survival was 9.1 months.
- Like Pfizer's Palbociclib, which performed well in a Phase II study, Bemaciclib is part of a new class of drug called CDK 4/6 inhibitors. These treatments limit the activity of two enzymes involved in cell division — cyclin-dependent kinases 4 and 6.
Fri, Apr. 4, 2:16 PM
- Merck (MRK +0.4%) wants to feed its controversial additive to almost a quarter of a million cattle to prove it is safe. The only glitch is that major meat processors lack enthusiasm for animals fed with the drug.
- Feedlot owners are glad to participate if they have assurances from the slaughterhouses that they will buy the animals.
- The company intends to sign up 5 to 15 feedlots per slaughterhouse that agrees to process the cattle.
- Raising a few eyebrows is Merck's silence regarding the identity of the study's lead investigator. Some observers perceive that its lack of disclosure implies the study's outcome is a foregone conclusion.
- Since the firm pulled Zilmax in August, many feedlots have switched to ractopamine-based Optaflexx made by Eli Lilly's (LLY +0.6%) Elanco Animal Health Unit.
Thu, Apr. 3, 9:05 AM
- Cowen & Company upgrades Eli Lilly (LLY) to Outperform with a $68 PT. Yesterday's close was $59.15.
- Consensus estimates for Q1 and Q2 are earnings of $0.70/share on revenues of $4.76B and $0.66/share on revenues of $4.85B, respectively.
- Consensus views for 2014 and 2015 are earnings of $2.81/share on revenues of $19.7B and $3.18 on revenues of $20.2B, respectively.
- 1825 mutual funds have positions, down from 1967 a year earlier.
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