Pharmaceutical company Eli Lilly (LLY) has been raking it in lately thanks to its two flagship products: Mounjaro and Zepbound. These two have brought in staggering amounts of cash, but what will Lilly be doing with all that money? It has plans, and investors are reasonably pleased, with shares up fractionally in Thursday afternoon’s trading.
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Eli Lilly now plans, reports note, to put that massive weight loss windfall to use on several major diseases, including Alzheimer’s, ALS, and “chronic pain.” It already may have an Alzheimer’s preventative drug in play with Kisunla, and is putting its windfall to work on several other fronts.
These are the huge problems, and indeed, they are sitting right in plain sight. But the problem is, reports note, that they are big problems and as such might not be solved for several years. Given that Eli Lilly is flush with cash, though, it can afford a payback period that stretches into years, and is still uncertain at best.
Keeping the Cash Flowing
But Lilly knows that, in order to pursue these far-off and somewhat amorphous goals of future cures, it will need to be backstopped by plenty of cash. Thus it, along with Merck (MRK), got together to create the Young Institute Pharmaceutical Manufacturing Consortium.
The consortium in question will work to develop new ways to produce pharmaceuticals, which will hopefully help meet rising demand for several types of drugs. That development has been hotly anticipated thanks in part to the rise of compounding pharmacies, which have been able to produce a kind of generic weight-loss drug to fill the gap between supply and demand that Eli Lilly has had a much harder time filling.
Is Eli Lilly a Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on LLY stock based on 16 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After an 17.45% rally in its share price over the past year, the average LLY price target of $1,016 per share implies 16.2% upside potential.
