Uranium fever seems to be spreading in the markets these days, or at least, the demand for some kind of radioactive product is. Eli Lilly (LLY) is perhaps the latest to get in on the action, as it looks to nuclear isotopes to back its cancer treatment plays. The news did not sit well with gun-shy investors, who sold off and sent shares down nearly 3% in Wednesday afternoon’s trading.
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Essentially, Lilly is out to land a supply of certain radioactive materials, which will be vital in building its supply of “radiopharmaceutical oncology” drugs. Thus, it put $10 million into Ionetix, which can manufacture an element called Actinium-225. Actinium-225 is actually in very low supply, so having Ionetix on hand will help ensure that Lilly has a steady supply.
The idea is that these radiopharmaceuticals can be used to poison cancer cells. A combination of these elements and certain antibody cocktails can fire the radioactive substance right into the cancer cell, where—as is commonly the case with something that gets irradiated—it dies. Lilly has been working in this vein for some time now, and it’s hardly alone. Lilly will have significant competition in this sector, and thus, it’s working to secure its supply lines in advance.
Taking the Lead in the Weight Loss Sector
Moreover, with weight loss drugs becoming an increasingly important part of lifestyles worldwide, it is clear that Lilly has a lot to lose in this field if it doesn’t stay ahead of its competitors. Luckily for Lilly, its Zepbound is starting to gain ground against chief rival Wegovy, thanks largely to a rising body of data that demonstrates its greater effectiveness.
With a 21% reduction in body weight over 72 weeks compared to a 15% reduction over 68 weeks on Wegovy, it is clear that Zepbound provides the better alternative. Though supplies are still slim, and many will take what they can get, Zepbound is starting to emerge as the more preferred option.
Is Eli Lilly a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on LLY stock based on 15 Buys and three Holds assigned in the past three months, as indicated by the graphic below. After a 48.44% rally in its share price over the past year, the average LLY price target of $955.67 per share implies 24.2% upside potential.
