Lilly Awash In Catalysts, Pipeline Updates, Mizuho Says In Upgrade

Eli Lilly And Co LLY received an upgrade from a Mizuho Securities analyst ahead of a key data readout in March.

The Lilly Analyst: Vamil Divan upgraded Lilly shares from Neutral to Buy and increased the price target from $164 to $222.

The Lilly Thesis: Lilly has navigated through a catalyst-heavy period and macroeconomic uncertainties that were mainly related to the U.S. presidential election, Divan said in a note.

Added to that, the company impressed with the initial top-line data from its Alzheimer's antibody donanemab, which was released last week, the analyst said.

Mizuho sees the potential for the drug to add significant upside to the Lilly story. 

Lilly has not only potentially found an effective drug, but also understood how to properly design its clinical trials to demonstrate that effect in the right patient population, Divan said. 

The fact that Lilly was able to generate statistically significant results on the primary endpoint in a relatively small trial bodes well for the absolute differences when the full data is released, as well as the clinical meaningfulness of those results, the analyst said.

The full data is set to be released March 13 at the 2021 International Congress on Alzheimer's and Parkinson's Disease, he said.

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The Lilly story is already robust with multiple recent positive developments in the areas of diabetes and oncology, Divan said.

Additionally, there are a number of additional pipeline data releases this year, including pivotal data from lebrikizumab and mirikizumab and additional clinical data from tirzepatide and Jardiance, the analyst said.

Since expectations from these data releases, especially lebrikizumab and mirikizumab, aren't too high, Divan sees the possibility for further upside.

Lilly is also expected to release additional Phase 2 Alzheimer's data from its tau antibody zagotenemab, the analyst said.

LLY Price Action: At last check, Lilly shares were rallying 3.99% to $198.43.

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