The biotech arena is abuzz with the sizzle of weight-loss drugs—projected to burgeon at a blistering compound annual rate of 45.7% to a whopping $82.8 billion by 2032, as per DataHorizzon Research. In this piece, we’ll size up the future of two stocks vying in this pulsating market.
Eli Lilly, a biotech firm, has sparked Wall Street’s and investors’ interest with its weight-loss drugs, Mounjaro and Zepbound, pitting them against Novo Nordisk’s Wegovy and Ozempic.
The Case for Amgen Stock
Founded in 1980, Amgen boasts a diverse product portfolio spanning from oncology, hematology, cardiovascular diseases, inflammation, and bone health to general medicine. So far in 2024, Amgen’s stock has dipped 0.3%.
In the obesity market, the company has now ventured with its anti-obesity candidate called MariTide. Amgen is set to report Phase 2 clinical trial data in late 2024, with results from 592 patients.
The Case for Eli Lilly Stock
Eli Lilly stock has shown a 30% return so far in 2024, surpassing the S&P 500’s 5% gain.
Eli Lilly’s Booming Earnings and Bright Future
Eli Lilly, the global pharmaceutical giant, has reported a staggering 19% surge in its earnings to $2.49 per share during the quarter. This is a remarkable accomplishment, considering the challenging economic climate the world is reeling from.
The company’s commitment to relentless innovation is apparent as it continues to pour significant resources into early-stage research and late-stage candidates to bolster its pipeline. The investment in research and development has amounted to a substantial $2.56 billion in the last quarter alone.
Thriving Amidst Regulatory Triumph
Moreover, Eli Lilly attained a significant milestone by securing FDA approval for Jaypirca, an achievement made possible under an Accelerated Approval Program. This approval fortifies the company’s position in the biotech market, demonstrating its capacity to navigate and thrive amidst rigorous regulatory processes.
Projections and Analyst Sentiment
Looking towards the future, the management anticipates revenue to surge within the range of $40.4 billion to $41.6 billion for 2024. This is an ambitious yet feasible goal that reflects the company’s bullish outlook and strategic initiatives.
According to analyst forecasts, the company’s earnings per share (EPS) are expected to hover within the $12.20 to $12.70 range, aligning with the company’s internal estimates. This synchronicity between internal and external projections underscores a robust consensus about the company’s trajectory.
Market Reflection and Competition
Out of the 21 analysts covering Eli Lilly’s stock, the overwhelming sentiment is bullish, with 18 rating it as a “strong buy,” one as a “moderate buy,” and the remaining two as a “hold.” This resounding confidence from industry experts showcases a deep-seated trust in the company’s potential.
Furthermore, Eli Lilly’s stock has surged past its average target price of $728.25, heralding an era of exceptional growth and prosperity. The highest target price of $865 alludes to a potential 14% upside, indicating that the market perception is in alignment with the company’s robust performance.
Which Biotech Stock Is a Better Buy Right Now?
In an incisive analysis, analysts have bestowed Amgen with a “moderate buy” rating, while Eli Lilly basks in a broader consensus with a resounding “strong buy” from Wall Street. This general exuberance towards Eli Lilly hints at a brighter and more promising future for the company.
Market Projections and Competitive Landscape
Market research firm Evaluate has prognosticated that Eli Lilly is set to emerge as one of the top two players in global new sales by 2024, alongside Novo. This forecast substantiates and consolidates the company’s position as a market leader, hinting at an era of unparalleled growth and dominance.
In contrast, Amgen faces a challenging trajectory due to the prolonged approval process and stern competition from industry behemoths such as Lilly and Novo Nordisk. This competitive landscape underscores Eli Lilly’s ascendancy and resilience in a fiercely contested market.
A Steep Valuation and Compelling Investment
It’s undeniable that Eli Lilly’s valuation currently stands at a lofty 60 times forward 2024 earnings, dwarfing Amgen’s valuation of just 14 times forward earnings. However, the differential valuation is a testament to Eli Lilly’s commanding presence and ensures a compelling case for a long-term investment in the face of inflated valuations.
In conclusion, despite its seemingly stretched valuation, Eli Lilly’s formidable portfolio, fortified by successful products and a promising pipeline, cements its status as a prudent and worthwhile long-term investment.
On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
