Court denying compounders’ motion positive for Eli Lilly, says Morgan Stanley

Morgan Stanley noted that two compounding groups – the Outsourcing Facilities Association and North American Custom Laboratories – filed a motion for a preliminary injunction in a bid to stop the FDA from removing Eli Lilly’s (LLY) tirzepatide from the shortage list and that on March 5 the court denied the compounders’ motion. The firm views this as “an incremental positive” for Lilly, and thinks the compounders will have to stop compounding tirzepatide after March 19 for 503B outsourcing facilities, but adds that the compounders “may or may not appeal this decision.” The firm has an Overweight rating and $1,146 price target on Eli Lilly shares.