Shares of Eli Lilly & Co. rose as much as 5% in Tuesday’s pre-market session after the US Food and Drug Administration (FDA) granted Emergency Use Authorization (EUA) for its investigational neutralizing antibody bamlanivimab’s (LY-CoV555) use in the treatment of mild to moderate COVID-19 .
Specifically, Lilly’s (LLY) bamlanivimab is now authorized for the treatment of COVID-19 in adults and pediatric patients 12 years and older with a positive COVID-19 test, who are at high risk for severe COVID-19 and hospitalization. According to the EUA, bamlanivimab should be administered immediately after a positive COVID-19 test and within 10 days of symptoms persisting. The authorization allows for the distribution and emergency use of bamlanivimab, which is administered via a single intravenous infusion.
Lilly will now begin shipping bamlanivimab to AmerisourceBergen, a national distributor under the US government’s allocation program. The US government has purchased 300,000 doses of bamlanivimab and promised that Americans will have no out-of-pocket costs for the medicine.
LY-CoV555 is a potent, neutralizing IgG1 monoclonal antibody (mAb) directed against the spike protein of SARS-CoV-2. It is designed to block viral attachment and entry into human cells, thus neutralizing the virus, potentially preventing and treating COVID-19.
“This emergency authorization allows us to make bamlanivimab available as a COVID-19 treatment for recently diagnosed, high-risk patients – adding a valuable tool for doctors fighting the now-increasing burden of this global pandemic,” said Lilly CEO David A. Ricks. “The rapid development and availability of bamlanivimab could not have been achieved without collaboration across the industry and the urgent work being done by the government to ensure appropriate allocation to patients who need it the most.”
The EUA was granted following data from a randomized, double-blind, placebo-controlled Phase 2 study in patients with recently diagnosed mild to moderate COVID-19 in the outpatient setting. Patients treated with bamlanivimab showed reduced viral load and rates of symptoms, Lilly said. The EUA includes a warning for hypersensitivity including anaphylaxis and infusion-related reactions. Lilly added that the data showed that bamlanivimab, when given early in the disease course, may help patients clear the virus and reduce hospitalizations.
Lilly said that it targets manufacturing of up to 1 million doses of bamlanivimab 700 mg by the end of 2020 – with 100,000 doses ready to ship within days of EUA authorization – for use around the world. The supply of Lilly’s antibody therapy is expected to increase substantially beginning in Q1 2021, as additional manufacturing resources come online throughout the year.
The drugmaker said that it has a robust, global supply chain in place to produce LY-CoV555 at five manufacturing sites worldwide.
Shares of LLY have dropped almost 8% over the past month but are up more than 8% on a year-to-date basis. (See Eli Lilly’s stock analysis on TipRanks).
Following LLY’s quarterly results, Mizuho analyst Vamil Divan on Oct. 27 reiterated a Hold rating on the stock with a $164 price target, noting that the company maintained its FY 2020 sales and EPS guidance, and commented that the higher end of the revenue range would “likely require the inclusion of moderate revenue from potential COVID-19 treatments, which is possible but not certain at this point.”
“LLY shares have faced some pressure since the company announced 2Q 2020 results three months ago, and we would expect further pressure given the disappointing 3Q 2020 results,” Divan wrote in a note to investors.
Overall, the stock scores a cautiously optimistic Moderate Buy analyst consensus. That’s with a $173.80 average analyst price target, indicating 22% upside potential lies ahead.
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