For healthcare stock Eli Lilly (NYSE:LLY), a major surprise emerged just recently that left Lilly on the back foot. Its new Alzheimer’s treatment, donanemab, just took a hit directly from the Food and Drug Administration (FDA) itself. That was sufficient to knock back Lilly share prices by 2% in Friday morning’s trading.
The reports proved surprising enough for anyone, and not in a good way. The FDA just extended its own deadline for approving donanemab in a move that most didn’t see coming. Reports noted that the FDA was looking for “outside advisors” to step in on this and review the drug’s safety and overall efficacy in “late-stage trial” phases. There’s no new date on that particular consultation, which suggests that the approval—if it ever comes—won’t come until at least April now.
This isn’t the first delay for donanemab, either; just last year, there was a separate delay that pushed approval into this year. While donanemab demonstrated a substantial slowdown in Alzheimer’s progression, concerns about bleeding issues and “brain swelling” were said to be a problem.
“Let’s Get Serious”
Meanwhile, Eli Lilly is actively shooting itself in the foot, though it hopes for good reasons. It’s directly taking on Ozempic users as being “vain” in some cases. At least those who either take it or prescribe it without a diagnosis of obesity. Lilly released an ad to that effect to air just before the Oscars, seeming to specifically target Hollywood, among others, who look to Ozempic as a way to quickly trim a few pounds that may not even be all that necessary to lose in the first place. The ad features the tagline: “Let’s get serious about what these medicines are for.”
Is Eli Lilly a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on LLY stock based on 16 Buys and three Holds assigned in the past three months, as indicated by the graphic below. After a 143.02% rally in its share price over the past year, the average LLY price target of $822.23 per share implies 7.69% upside potential.
