Eli Lilly's $2.3 Billion Oncology Bet Arrives Just Before a Pivotal Earnings Report

Eli Lilly buys Ajax Therapeutics for up to $2.3B, adding a Phase 1 myelofibrosis therapy ahead of Q1 earnings. Analysts raise targets but caution on Foundayo competition.

The timing is striking. Eli Lilly has struck a deal worth up to $2.3 billion to acquire Ajax Therapeutics, injecting a promising blood cancer therapy into its pipeline just days before first-quarter results land on Wednesday, April 30. The move signals that the drugmaker is not content to let its GLP-1 dominance define its entire future.

The transaction centers on AJ1-11095, a once-daily oral Type-II JAK2 inhibitor that entered Phase 1 testing late last year. The drug targets patients with myelofibrosis who have already been treated with a Type-I JAK2 therapy — a population with limited options today. Lilly expects to complete dose-finding and release initial efficacy data before the end of 2025.

The purchase price is structured as an all-cash deal with milestone-based components, though it remains subject to U.S. antitrust clearance under the Hart-Scott-Rodino Act.

Analysts Raise Targets, But Caution Creeps In

Leerink Partners responded to the Ajax news by lifting its price target sharply from $1,058 to $1,296, maintaining an "Outperform" rating. Yet the bank trimmed its 2027 EPS estimate slightly to $42.30, citing mounting competition in the oral weight-loss space. Morgan Stanley and Bernstein remain bullish as well, with targets of $1,327 and $1,300 respectively.

Those projections sit far above current levels. Eli Lilly shares trade at roughly €752, down nearly 18 percent since the start of the year and well below the 50-day moving average of approximately €823.

The Foundayo Factor

Much of that weakness traces back to Foundayo, Lilly's oral weight-loss pill, which has gotten off to a slower start than anticipated. Comparisons with rival products have been unfavorable so far, and that narrative is likely to dominate Wednesday's earnings call.

Wall Street is looking for first-quarter revenue of roughly $17.6 billion and earnings per share of $7.26, according to the analyst consensus. That would represent more than double the $3.34 per share reported in the year-ago period. Of the 30 analysts covering the stock, 23 rate it a strong buy.

Management's full-year 2026 guidance provides the broader context: revenue in a range of $80 billion to $83 billion, roughly 25 percent above last year's $65.2 billion. Non-GAAP earnings per share are expected between $33.50 and $35.00, up from $24.21 in 2025.

But headwinds are real. Price erosion in the low-to-mid double-digit percentage range is expected for the full year, and rising R&D and selling costs are squeezing margins. Volume growth from the GLP-1 portfolio will need to offset those pressures.

Foundayo itself does not yet appear in the first-quarter numbers, but Morningstar is already penciling in $1.7 billion in sales for the drug this year. By 2027, international revenue is expected to surpass U.S. sales. Lilly's pill has a manufacturing edge over Novo Nordisk's oral competitor, which has yet to provide firm timelines for a global launch.

A Busy Acquisition Spree

The Ajax deal is just the latest in a string of bolt-on acquisitions. In March, Lilly closed the $1.2 billion purchase of Ventyx Biosciences, a developer of oral inflammation drugs. Weeks later came the announced acquisition of Centessa Pharmaceuticals for up to $7.8 billion, targeting sleep-disorder therapies including narcolepsy.

On the oncology front, Lilly recently reported positive Phase 3 data for Jaypirca (pirtobrutinib) in relapsed or refractory chronic lymphocytic leukemia. The study hit its primary endpoint with a statistically significant improvement in progression-free survival — the fourth positive Phase 3 readout for the drug.

Valuation With a Wide Uncertainty Band

Morningstar sees fair value at $870, up from $770 following strong 2025 results. The research firm projects 27 percent revenue growth in 2026, followed by 20 percent the year after. Yet it maintains a high uncertainty rating, pointing to insurance coverage dynamics, pricing pressure, and the complexity of managing multiple simultaneous product launches.

Mounjaro and Zepbound already accounted for 56 percent of total revenue in 2025, and that share could climb above 60 percent in 2026. Patent protection extends to at least 2036.

Wednesday's report will test whether Lilly can deliver on its ambitious start to the year — and whether management provides enough detail on Foundayo prescribing trends to validate the Street's expectations. For now, the stock sits at a discount to most analyst targets, but the path back depends on execution across both the weight-loss juggernaut and the newly expanded oncology pipeline.