Positive Data Boosts Outlook for Lilly
The wide-moat drugmaker's growth prospects are improving.
We are increasing our fair value estimate for Eli Lilly (LLY) to $142 per share from $130 on the basis of positive adjuvant breast cancer data for Verzenio. The data positions Lilly’s drug to enter the large adjuvant breast cancer setting ahead of key competitors Ibrance (from Pfizer (PFE)) and Kisqali (from Novartis (NVS)). While Verzenio was the last major CDK 4/6 breast cancer drug to enter the metastatic (late-stage) breast cancer market, it looks poised to be first in the adjuvant (early-stage) setting.
The strong data should help support Lilly’s wide economic moat by significantly expanding the sales potential of a drug that had been relegated to likely gaining only a small slice of the late-stage market before this positive adjuvant data. Additionally, the recent setback for Ibrance in the adjuvant setting could mean that Lilly will have a first-mover advantage in the adjuvant setting for a long duration. However, Pfizer has another phase 3 study with Ibrance in a high-risk adjuvant patient group (similar to Lilly’s positive study) set to report in the second half of 2020, and if successful, this may limit the duration of Lilly’s first-mover advantage. Also, Novartis should complete an adjuvant study with Kisqali by 2022, opening up another potential competitor in the early-stage setting.
Damien Conover does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.