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Multiple waves of obesity treatment adoption should drive Eli Lilly higher from here, according to Leerink Partners. The investment firm upgraded the biopharmaceutical stock to outperform from market perform. Analyst David Risinger also hiked his price target to $1,104 per share from $886, pointing to upside of 19% from Friday’s close. Eli Lilly reached deal with the Trump administration in which Medicare will begin covering GLP-1s for certain patients with obesity beginning next year. Monthly out-of-pocket costs for patients could range anywhere from $50 to $350. LLY YTD mountain LLY YTD chart “LLY’s deal with the U.S. government should significantly enhance obesity drug adoption prospects and more than offset lower pricing. LLY estimates that the Medicare agreement will add 40M U.S. potential candidates for obesity treatment, which represents over 4x LLY’s estimate of the current 8.5M U.S. patients on obesity Rx treatment today,” the analyst wrote. “We expect LLY to succeed in the price for volume game, given its tremendous scale advantages and growing obesity portfolio.” The analyst also expects three new drugs to strengthen Eli Lilly’s leadership position and act as growth drivers ahead — orforglipron, retatrutide and eloralintide. In particular, Risinger expects the last of these three to be a “mega-blockbuster” drug. “We envision market positioning as follows: orforglipron for overweight and modestly obese patients plus as a global low-cost therapy for T2D, tirzepatide as the ‘workhorse’ for obese patients, retatrutide for more severely obese patients or those who fail tirzepatide, and eloralintide for patients who cannot tolerate GLP-1s or want an off-ramp,” he wrote. “Ex-U.S. countries provide greater coverage for LLY therapies in the future.” Eli Lilly stock has popped 20% this year.
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