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Lilly (LLY) Stock Up on Raised 2020 View, Upbeat 2021 Guidance
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Eli Lilly & Company (LLY - Free Report) issued a better-than-expected financial guidance for 2021, which pushed its shares up 6% on Tuesday. The drug giant also raised its previously issued 2020 sales and earnings projections. The company also announced a 15% increase in its dividend for 2021. Lilly also announced plans to acquire New York-based gene therapy maker, Prevail Therapeutics .
Year to date, Lilly’s shares have risen 27.5% compared with the industry’s increase of 1.2%.
2021 Guidance
Lilly expects adjusted earnings in the range of $7.75-$8.40 per share in 2021. The current Zacks Consensus Estimate for earnings is $7.95 per share. Revenues in 2021 are expected in the range of $26.5billion-$28.0 billion as volumes are expected to grow on continued price decline. The Zacks Consensus Estimate for sales is pegged lower at $26.3 billion.
Lilly expects its revenue growth to be driven by higher demand for key products including Trulicity, Taltz, Verzenio, Jardiance, Olumiant, Cyramza, Emgality, Tyvyt, as well as newly launched cancer drug, Retevmo. Importantly, Lilly expects revenues in the range of $1-$2 billion from COVID-19 therapies. Last month, the FDA granted emergency use authorization (EUA) to Lilly’s COVID-19 antibody drug, bamlanivimab (LY-CoV555) to treat mild-to-moderate COVID-19 illness at high risk of progressing to severe COVID-19. The FDA also granted EUA to Lilly and Incyte’s (INCY - Free Report) oral JAK inhibitor Olumiant for use in combination with Gilead’s (GILD - Free Report) remdesivir to treat hospitalized COVID-19 patients
However, generic competition for several drugs, rising pricing pressure in the United States due to rebates and legislated increases in Medicare Part D cost sharing and price declines in some international markets like China, Japan and Europe will continue to remain top-line headwinds in 2021. In the United States, prices are expected to decline in a low-to-mid-single digit range.
Gross margin is expected to be approximately 79%. Adjusted tax rate is expected to be approximately 15%. Adjusted operating margin is expected to be 32% in 2021.
Marketing, selling and administrative expense are expected to be in the range of $6.2 billion to $6.4 billion. Research and development expense is expected to be in the range of $6.5 billion to $6.7 billion, which includes investment of approximately $300 million to $400 million in developing COVID-19 therapies.
2020 Guidance Upped
Lilly raised its previously issued 2020 adjusted earnings and sales outlook. Lilly now expects full-year earnings in the range of $7.45- $7.65, up from the prior expectations of $7.20-$7.40. The earnings guidance now indicates year-over-year growth in the range of 23-27% compared with the prior range of 19-23%.
Revenues are expected in the range of $24.2-$24.7 billion, up from the prior expectation of $23.7-$24.2 billion. Expectations for higher bamlanivimab sales due to an additional purchase agreement signed with the U.S. government this month led to the guidance increase.
Gross margin is expected to be approximately 79% (previous 80%). However, marketing, selling and administrative expense guidance was maintained in the range of $6-$6.1 billion while research and development expense is expected in the band of $5.8-$5.9 billion. Adjusted operating margin is expected to be 30% in 2020 (previously 29%).
Acquisition of Prevail Therapeutics
Lilly announced a definitive agreement to acquire Prevail Therapeutics for $22.50 per share in cash or an aggregate value of $880 million. The acquisition will add Prevail’s promising gene-therapy candidates, targeting neurodegenerative diseases, to Lilly’s portfolio. These include PR001, for Parkinson's disease and neuronopathic Gaucher disease, and PR006, for frontotemporal dementia, which are in clinical development.
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Lilly (LLY) Stock Up on Raised 2020 View, Upbeat 2021 Guidance
Eli Lilly & Company (LLY - Free Report) issued a better-than-expected financial guidance for 2021, which pushed its shares up 6% on Tuesday. The drug giant also raised its previously issued 2020 sales and earnings projections. The company also announced a 15% increase in its dividend for 2021. Lilly also announced plans to acquire New York-based gene therapy maker, Prevail Therapeutics .
Year to date, Lilly’s shares have risen 27.5% compared with the industry’s increase of 1.2%.
2021 Guidance
Lilly expects adjusted earnings in the range of $7.75-$8.40 per share in 2021. The current Zacks Consensus Estimate for earnings is $7.95 per share. Revenues in 2021 are expected in the range of $26.5billion-$28.0 billion as volumes are expected to grow on continued price decline. The Zacks Consensus Estimate for sales is pegged lower at $26.3 billion.
Lilly expects its revenue growth to be driven by higher demand for key products including Trulicity, Taltz, Verzenio, Jardiance, Olumiant, Cyramza, Emgality, Tyvyt, as well as newly launched cancer drug, Retevmo. Importantly, Lilly expects revenues in the range of $1-$2 billion from COVID-19 therapies. Last month, the FDA granted emergency use authorization (EUA) to Lilly’s COVID-19 antibody drug, bamlanivimab (LY-CoV555) to treat mild-to-moderate COVID-19 illness at high risk of progressing to severe COVID-19. The FDA also granted EUA to Lilly and Incyte’s (INCY - Free Report) oral JAK inhibitor Olumiant for use in combination with Gilead’s (GILD - Free Report) remdesivir to treat hospitalized COVID-19 patients
However, generic competition for several drugs, rising pricing pressure in the United States due to rebates and legislated increases in Medicare Part D cost sharing and price declines in some international markets like China, Japan and Europe will continue to remain top-line headwinds in 2021. In the United States, prices are expected to decline in a low-to-mid-single digit range.
Gross margin is expected to be approximately 79%. Adjusted tax rate is expected to be approximately 15%. Adjusted operating margin is expected to be 32% in 2021.
Marketing, selling and administrative expense are expected to be in the range of $6.2 billion to $6.4 billion. Research and development expense is expected to be in the range of $6.5 billion to $6.7 billion, which includes investment of approximately $300 million to $400 million in developing COVID-19 therapies.
2020 Guidance Upped
Lilly raised its previously issued 2020 adjusted earnings and sales outlook. Lilly now expects full-year earnings in the range of $7.45- $7.65, up from the prior expectations of $7.20-$7.40. The earnings guidance now indicates year-over-year growth in the range of 23-27% compared with the prior range of 19-23%.
Revenues are expected in the range of $24.2-$24.7 billion, up from the prior expectation of $23.7-$24.2 billion. Expectations for higher bamlanivimab sales due to an additional purchase agreement signed with the U.S. government this month led to the guidance increase.
Gross margin is expected to be approximately 79% (previous 80%). However, marketing, selling and administrative expense guidance was maintained in the range of $6-$6.1 billion while research and development expense is expected in the band of $5.8-$5.9 billion. Adjusted operating margin is expected to be 30% in 2020 (previously 29%).
Acquisition of Prevail Therapeutics
Lilly announced a definitive agreement to acquire Prevail Therapeutics for $22.50 per share in cash or an aggregate value of $880 million. The acquisition will add Prevail’s promising gene-therapy candidates, targeting neurodegenerative diseases, to Lilly’s portfolio. These include PR001, for Parkinson's disease and neuronopathic Gaucher disease, and PR006, for frontotemporal dementia, which are in clinical development.
Lilly currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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