Eli Lilly’s Baricitinib Gets FDA Approval for Emergency Use with Remdesivir to Treat COVID-19 Patients

Eli Lilly and Company, an American pharmaceutical company headquartered in Indianapolis, said its arthritis drug, baricitinib, in combination with Gilead Sciences Inc’s remdesivir, received an emergency use authorization from the U.S. Food and Drug Administration for the treatment of hospitalized patients with COVID-19.

The authorization is temporary and does not replace the formal review and approval process. In the U.S., baricitinib has not been approved by the FDA to treat COVID-19, and the efficacy, safety and optimal duration of treatment of baricitinib for COVID-19 has not been established. This is the first combination regimen authorized by FDA. Evaluation of baricitinib’s efficacy and safety as a treatment for COVID-19 is ongoing in clinical trials, the company said.

Eli Lilly shares closed 2.3% higher at $143.41 on Thursday; the stock is up about 10% so far this year.

Executive Comments

“Since the start of the COVID-19 pandemic, Lilly has been committed to finding potential treatments to help people around the world who’ve been impacted by this virus,” said David A. Ricks, Lilly chairman and CEO.

“Today’s FDA action for baricitinib marks the second Lilly therapy to be granted an EUA, in addition to the recent neutralizing antibody EUA for high-risk non-hospitalized patients, increasing the number of treatment options for COVID-19 patients at different stages of the disease. This is an important milestone for hospitalized patients on oxygen, as baricitinib may help speed their recovery.”

Eli Lilly Stock Price Forecast

Ten equity analysts forecast the average price in 12 months at $173.00 with a high forecast of $200.00 and a low forecast of $144.00. The average price target represents a 20.63% increase from the last price of $143.41. From those ten analysts, seven rated “Buy”, three rated “Hold” and none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $170 with a high of $207 under a bull-case scenario and $121 under the worst-case scenario. The firm currently has an “Overweight” rating on the pharmaceutical company’s stock.

Several other analysts have also upgraded their stock outlook. Mizuho lowered their target price to $156 from $164. Bernstein started with market-perform rating; target price $150. Berenberg Bank initiated coverage and set a “hold” rating and a $144.00 price target. ValuEngine cut Eli Lilly and to a “sell” rating from a “hold”. At last, JP Morgan boosted their price objective to $200 from $190 and gave the stock an “overweight” rating.

Analyst Comments

“We are Overweight Eli Lilly shares as we believe consensus underappreciates Lilly’s long-term revenue and EPS growth potential. We project 2020e-2025e CAGR revenue +8% and EPS +14%. We see upside potential for pipeline candidate tirzepatide’s “trifecta” opportunity in diabetes, obesity, and cardiovascular health,” said David Risinger, equity analyst at Morgan Stanley.

“Pipeline newsflow on diabetes and Alzheimer’s candidates could drive stock upside/downside, but we view Eli Lilly’s Alzheimer’s pipeline as an inexpensive call option. Lilly could pursue additional tuck-in transactions to enhance long-term growth prospects,” Risinger added.