Citi Research has increased the price target for Eli Lilly And Co LLY, reflecting increased anticipated risk-adjusted peak sales for the company’s oral small molecule GLP-1 agonist orforglipron as a mono/fixed-dose combination.
The analyst noted that the risk of drug-related liver toxicity is decreasing, with Phase 3 trials ongoing since 2023. Considering the potential peak sales of incretin drugs exceeding $85 billion for Eli Lilly, Citi says it is closely monitoring competitive threats to Eli Lilly and Novo Nordisk A/S’s NVO market dominance.
With a Buy rating, the analyst has increased the price target from $675 to $895. Valuation ranges from $611 to $1,069 based on various assumptions regarding incretin sales forecasts.
Generic versions of semaglutide are expected to flood the market in China in the near future and Western markets after 2032, with several manufacturers scaling up production.
Additionally, legislative proposals to eliminate pharmacy benefit manager rebates could impact competition.
Despite these risks, Eli Lilly and Novo Nordisk are positioned to maintain their market leadership and expand.
The FDA’s website indicates that Eli Lilly’s diabetes drug Mounjaro (tirzepatide) will face tight supply until 2024 due to high demand.
The doses of 7.5, 10, 12.5, and 15 milligrams are limited until April, while lower doses are available.
Initially, three doses were expected to have limited availability until early March.
Reuters noted that Lilly is still producing and shipping all Zepbound doses, but unprecedented demand may cause difficulties for some patients in filling their prescriptions.
Price Action: LLY shares are up 0.37% at $763.36 on the last check Tuesday.
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