Eli Lilly (LLY) has been awarded a $312.5 million firm-fixed-price contract from the US army for the procurement of its monoclonal antibody therapeutic LY-CoV555 for the treatment of COVID-19.
Bids were solicited via the internet with one received, the US Department of Defense revealed.
Work will be performed in Indianapolis, Indiana, with an estimated completion date of June 30, 2021 and the U.S. Army Contracting Command, Aberdeen Proving Ground, Maryland, is the contracting activity.
“Fiscal 2021 Coronavirus Aid, Relief, and Economic Security (CARES) Act funds in the amount of $312,500,000 were obligated at the time of the award” the department stated.
Eli Lilly has also just struck a $375 million agreement with the US government for the supply 300,000 vials of LY-CoV555. According to the agreement, the US government will receive the LY-CoV555 vials once it has been granted Emergency Use Authorization (EUA) by the US Food and Drug Administration (FDA).
LY-CoV555 is designed to block viral attachment and entry into human cells, thus neutralizing the virus, potentially preventing and treating COVID-19.
“Supply agreements with governments – such as this one with the US government to meet Operation Warp Speed goals – are fundamental to enable the most widespread and equitable access to our potential therapy,” said Lilly CEO David A. Ricks.
“The US is experiencing a surge in COVID-19 cases and associated hospitalizations, and we believe [LY-CoV555] could be an important therapeutic option that can bring value to the overall healthcare system, as it has shown a potential benefit in clinical outcomes with a reduction in viral load and rates of symptoms and hospitalizations.”
Lilly targets manufacturing of up to 1 million doses of LY-CoV555 700 mg by the end of 2020 – with 100,000 doses ready to ship within days of EUA authorization – for use around the world. The supply of Lilly’s antibody therapy is expected to increase substantially beginning in Q1 2021, as additional manufacturing resources come online throughout the year.
The drugmaker said that it has a robust, global supply chain in place to produce LY-CoV555 at 5 manufacturing sites worldwide. To ensure rapid access of the treatment to patients around the world, Lilly has invested in large-scale manufacturing of LY-CoV555, even before data demonstrated its potential to become a meaningful therapeutic option for COVID-19, the company added.
However, the antibody treatment suffered a setback recently after data found that it was “unlikely” to help COVID-10 hospitalized patients recover from the advanced stage of the disease. As a result, the US-based Phase 3 clinical trial for hospitalized patients was stopped, while all other ongoing trials for its coronavirus antibody treatments will be continued.
Shares of LLY have dropped more than 6% over the past 5 days and are now trading close to their start of the year level. (See Eli Lilly’s stock analysis on TipRanks).
Nonetheless, the stock scores a bullish Strong Buy Street consensus with a majority of buy ratings. That’s with a $175.80 average analyst price target, indicating 33% upside potential lies ahead.
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