下雨天，閑著也是閑著，分析一把，為自己找借口站位或不站位，選這個股分析是因為它最近跌了, fallen angel，分享思緒而已, 不做推薦或不推薦，YMYD
I. Price Action/Performance
- Closed at $713.71 (round up to $714) on Friday May 23rd, PEG 1.43/RSI 38.49
- down 20.58% from the recent high close $899 on Apr 30th
- and down 25.62 % from the one-year high close $960 in August 2024
- SMA20/50/200: $770/784/837
- TA supporting $695, resistance $890.
- Q1 ER on May 1st: it was a double-beat (EPS surprise +2.51%, revenue surprise +0.48%), but stock price dropped significantly due to negative adjustment of 2025 guidance: EPS from 22.05/23.55 to 20.17/21.67, down about -8.25% (from mean 22.8 to 20.92)
- May 1st: Stock price down from $899 to 794 (-11.7%) in one day, then further down for two wks to 715 (-20%). (To me, it was over reacted, or previously over valued, or both)
II. A Simple Question
- Is it an opportunity now May/June 2025 for mid to long term (1yr and longer) investment?
III: Information is needed about:
- FA of the company
- Competitors
- Industry/section and regulatory policy
IIIa - FA:
- Products
- GLP-1 Medications (glucagon-likepeptide-1/GLP-1 receptor agonist): Drugs like Mounjaro and Zepbound (active ingredient tirzepatide) are expected to continue driving revenue growth.
- Mounjaro: Q1 revenue 3841.8/12728.5 =30.2%
- Zepbound: 2311.9/12728.5 =18.2%
- Verzenio: 1158.9/12728.5=9.1%
- Other products: 42.5%
2. In pipelines
- Orforglipron: The oral form of GLP-1 medication, currently in Phase 3 trials, with potential approval anticipated soon (in 2026?). The 1st one of the 7 trials, ACHIEVE-1, was successful, likely the major reason of driving the stock to the recent high in mid to late April.
- Global Expansion: Plans to launch Mounjaro in markets such as India, Brazil, and Mexico could significantly increase sales. India: launched in March 2025; Brazil, Mexico, and China in 2026.
- Global Expansion: On May 21st, Lilly's Kisunla (donanemab) receives marketing authorization in Australia for the treatment of early symptomatic Alzheimer's disease.
- Manufacturing Investments: A $27 billion investment in U.S. manufacturing plants aims to enhance production capabilities and mitigate supply chain risks. This was announced in March as a strategic response to tariff uncertainty. New plants will bring in more revenue down the road.
3. Year to year growth and EPS trend, outlook
- Growth: Q1 2025 ER on May 1st was a double-beat (EPS surprise +2.51%, revenue surprise +0.48%). QtQ growth EPS 23% and revenue 45%
- EPS growth last 5 yrs 18.77%, next five yrs 41.43% (only based on these two indicators, I checked other a handful of pharma stocks but haven’t found one better than Lly).
- Outlook: as per Q1 2025 ER on May 1st, Lilly made a negative adjustment of 2025 guidance: EPS from 22.05/23.55 to 20.17/21.67, down about -8.25% (from mean 22.8 to 20.92). This adjustment may not reflect a fundamental issue of growth and management; rather it was to cope with the policy/tariff impact.
IIIb - Competitors
- Novo Nordisk: Ozempic and Wegovy are different brand names for the same injectable drug, semaglutide, which is a GLP-1 medication. Wegovy is approved to manage weight and obesity. Ozempic is approved to lower blood sugar for type 2 diabetes.
- Market Competition: Increased competition from generic and oral medications may impact market share. Pretty much a number of other pharmas share the market pie and compete with Lly since Lly has products in several fields, diabetes and weight control, neuroscience, cancer and immunology. The major revenue comes from diabetes/weight control, thus currently Novo appears to be the major one.
IIIc - Industry/section and regulatory policy
- Regulatory Challenges: Delays or issues in drug approvals could affect revenue projections due to the recent management change under the new administration (FDA) and changes of the Medicare program etc. Perhaps the worst time window has passed; the new government is learning after the first 100 days aggressive trial.
- Economic Factors: Global economic uncertainties may influence healthcare spending and drug accessibility. This is a rather larger background type of impact; and will not just do harm to Lly.
IV. Next steps
- Watch policy and tariff development
- Watch potential supply chain shortage issue of tirzepatide. It was likely a factor of driving stock price down earlier 2025, but was resolved after.
- Watch Q2 2025 ER call, August 7, 2025 at 8:30 AM EDT
- Watch the market in general.
