Is the $856 million investment a reason to consider buying Eli Lilly's stocks?
Eli Lilly and Gate Biosciences Collaborate on Groundbreaking Drug Development
Eli Lilly, a renowned pharmaceutical giant, has recently signed an agreement with Gate Biosciences to co-develop a potential new class of drugs called "Molecular Gates." This collaboration is worth nearly $1 billion, marking a significant step forward in the company's mission to continue seeking out high-growth opportunities.
Founded in 2021, Gate Biosciences is still in the early stages of this project. The goal is to unlock potential therapies for many conditions that are currently untreated or undertreated by developing a novel mechanism to target difficult-to-drug proteins.
Eli Lilly, with its deep lineup of promising programs, stands to benefit greatly from this partnership. The company's commitment to innovation is evident in its newer medicines and pipeline candidates in areas such as immunology, oncology, Alzheimer's disease, and diabetes. In fact, Eli Lilly remains a top player in the diabetes market.
The agreement with Gate Biosciences is not the only deal Eli Lilly has signed recently. The company has been actively pursuing high-growth opportunities, as evidenced by its acquisitions of Verve Therapeutics, SiteOne Therapeutics, and Scorpion Therapeutics' candidate STX-478.
Despite not yet seeing immediate results from these recent investments, they are viewed as promising. Eli Lilly's revenue is growing significantly faster than its similarly sized peers, and the company's stock's attractiveness is not solely based on these licensing deals and acquisitions.
One of Eli Lilly's next major developments is the anticipated FDA approval of the oral GLP-1 agonist Orforglipron by late 2025. This drug shows promising Phase 3 results for diabetes, and its approval would further strengthen Eli Lilly's position in the diabetes market.
Another significant development is the expanding indications for their already approved Alzheimer's drug Donanemab (Kisunla), with strong sales projections. However, no new specific licensing announcements beyond these are currently disclosed publicly.
In addition to its progress in the pharmaceutical industry, Eli Lilly is also making strides in the weight management market. The company is emerging as a leader in this field, with promising programs such as Orforglipron, a potential oral weight-loss medicine, and retatrutide, which mimics the action of three gut hormones.
Eli Lilly's strong financial performance is another reason to invest in the company. The company pays a regular dividend that has more than doubled over the past five years, and its revenue growth outpaces that of its peers.
In conclusion, Eli Lilly's collaboration with Gate Biosciences, its ongoing acquisitions and licensing agreements, and its promising pipeline of new drugs position the company well for future growth. The company's commitment to innovation, its strong financial performance, and its leadership roles in the diabetes and weight management markets make it an attractive investment opportunity for many.
