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UBS maintained its Buy rating and $1,050.00 price target on Eli Lilly (NYSE:LLY) Thursday. The pharmaceutical giant, with a market capitalization of $733.75 billion and an impressive 36.38% revenue growth over the last twelve months, has seen its recent launch of single-use tirzepatide vials shift patient practices toward its weight loss drug Zepbound. According to InvestingPro analysis, Lilly maintains a "GREAT" financial health score, supported by strong fundamentals and market position.
The single vials, sold exclusively through LillyDirect, are priced at $349 monthly for the 2.5mg starter dose and $499 monthly for the 5mg, 7.5mg, and 10mg doses. UBS noted that patients can potentially split a single 10mg vial into four 2.5mg doses, creating an effective price of $125 monthly from the initial $499 cost. This pricing strategy aligns with Lilly’s robust business model, which generates an impressive 81.7% gross profit margin.
Lilly appears aware of this splitting trend, implementing a tiered pricing structure that increases costs for delayed refills. If patients wait longer than 45 days between refills, the price rises to $599 for 7.5mg and $699 for 10mg doses.
At the $699 price point for a 10mg dose, the effective monthly cost becomes $175 for patients splitting into four 2.5mg doses or $350 for those creating two 5mg doses. UBS observed these effective prices align with compounding pharmacy rates, which typically range between $150-350 monthly.
The splitting practice may cause Lilly to reconsider launching single vials for higher Zepbound doses of 12.5mg and 15mg. However, UBS believes the effective split prices could indicate a floor price Lilly finds acceptable for its weight loss medication. With analysts setting price targets ranging from $650 to $1,190, detailed financial analysis and additional insights are available through InvestingPro’s comprehensive research reports, which cover over 1,400 top US stocks.
In other recent news, UBS analysts have reiterated a Buy rating for Eli Lilly, maintaining a price target of $1,050. This decision comes as the market anticipates the results of the Phase 3 SURPASS-CVOT trial, comparing Mounjaro to Trulicity in patients with type 2 diabetes. The trial’s outcome, expected by June 2025, could significantly influence Eli Lilly’s positioning in the diabetes treatment landscape. Meanwhile, TD Cowen has adjusted its price target for Eli Lilly to $960, down from $1,050, while maintaining a Buy rating. This adjustment aligns with the firm’s updated financial model following the company’s Q1 results and recent developments.
Erste Group has downgraded Eli Lilly from a Buy to a Hold rating, citing concerns over the company’s future earnings projections. The revised earnings per share forecast for 2025, now set between $20.2 and $21.7, played a key role in this decision. Additionally, UBS analysts have been exploring patient feedback on Eli Lilly’s products in light of an upcoming CVS formulary change, which will prefer Wegovy over Zepbound starting July 2025. This change could impact the perception and prescription of Eli Lilly’s products.
Separately, the weight-loss drug Wegovy has seen increased usage among American teenagers, with prescription rates rising significantly. This trend highlights the growing demand for effective obesity treatments in adolescents. The data, collected by health data firm Truveta, underscores the importance of such medications when lifestyle changes are insufficient. These developments collectively paint a complex picture for Eli Lilly as the company navigates market dynamics and prepares for upcoming trial results.
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