Analyst Note| Damien Conover |
Eli Lilly reported fourth-quarter results slightly ahead of our expectations, and we plan to increase our fair value estimate. However, the market is negatively reacting to the results, which we believe is due to performance of diabetes drug Mounjaro. The drug saw $297 million in sales, which is a strong number for a new drug but likely below what many were expecting, given the very strong prescriptions trends. We believe the low insurance coverage rate (now close to 50% in the U.S.) for the drug is weighing down sales relative to the prescription trends. We expect Mounjaro coverage to continue to improve and sales to rapidly increase.