What's Going On With Eli Lilly Stock Wednesday?

Eli Lilly And Co LLY shares are trading higher Wednesday. The stock appears to be moving alongside Novo Nordisk NVO shares after the drugmaker halted trials on early signs of efficiency.

What Happened: The independent Data Monitoring Committee recommended that Novo Nordisk stop its kidney outcomes trial FLOW after interim analysis showed the treatment would be successful. 

Eli Lilly makes a similar GLP-1 drug to Novo's Ozempic called Mounjaro, which was highlighted by Morgan Stanley in a new note. 

Morgan Stanley analyst David Phung maintained Eli Lilly with an Overweight rating and raised the price target from $640 to $673, citing improved 2024 to 2026 estimates for the company's type 2 diabetes medication Mounjaro based on an updated view of the company's launch trajectory in obesity. 

"We are projecting that LLY will grow its volumes by ~12mn TRx in 2024 vs. 2023, which represents <50% of the peak capacity that will start coming online this year ... While the specific timeline for the new capacity to come online is uncertain, we feel this represents a conservative estimate," Phung said in a new note to clients. 

Morgan Stanley now anticipates 2024 sales of $11.3 billion and 2025 sales of $17.5 billion versus prior estimates of $9.7 billion and $13.9 billion. Mounjaro is expected to significantly outpace Novo Nordisk's Wegovy sales in its first year on the market. 

See Also: Novo Nordisk's Weight Loss Drugs Like Wegovy, Ozempic May Pose Serious Stomach Risks, Study Suggests

LLY Price Action: Eli Lilly shares were up 3.49% at $599.24 at the time of publication, according to Benzinga Pro.

Photo: courtesy of Eli Lilly.