Eli Lilly Shares Dip Despite Key Regulatory Win

Eli Lilly US5324571083

Investors continued to sell shares of pharmaceutical giant Eli Lilly on Thursday, even as the company secured a significant regulatory victory. The U.S. Food and Drug Administration (FDA) granted full approval for its leukemia drug, Jaypirca. This fundamental advancement, however, failed to lift the stock, leaving market participants to debate whether the current pullback represents a buying opportunity or the start of a deeper correction.

Despite the positive news flow, Eli Lilly's stock recently traded at 868.30 euros, reflecting a weekly loss of approximately 6 percent. From a technical perspective, an RSI reading of 28.5 suggests the equity is in oversold territory. Analysts largely interpret this period of weakness as a potential entry point.

BMO Capital Markets responded swiftly to the FDA decision, raising its price target from $1,100 to $1,200 while maintaining an "Outperform" rating. Guggenheim analysts reaffirmed a buy recommendation with a $1,163 target. The consensus view remains optimistic, supported by the company's robust third-quarter revenue growth of nearly 54 percent.

Market focus now shifts to the close of fiscal year 2025. With projected earnings per share between $23.00 and $23.70 and an anticipated regulatory submission for the oral weight-loss pill Orforglipron, the fundamental drivers for long-term appreciation are considered intact.

Full FDA Approval Expands Jaypirca's Reach

The most operationally significant development is the conversion of Jaypirca’s accelerated approval into a full, traditional FDA authorization. A crucial aspect of this move is the expansion of its indicated use. The drug is now cleared for earlier deployment in the treatment regimen for adult patients with chronic lymphocytic leukemia (CLL) or small lymphocytic lymphoma (SLL).

This decision is grounded in data from the Phase III BRUIN CLL-321 trial. The study demonstrated that Jaypirca, as the first non-covalent BTK inhibitor, significantly improves progression-free survival compared to standard therapies. By moving the treatment into the second line, Eli Lilly substantially enlarges the addressable patient population for this oncology product. Sales momentum was already evident prior to this decision, with recent revenue surging 76 percent to $143 million.

Strategic Move in the Weight-Loss Arena

Beyond its oncology success, Eli Lilly is advancing its strategy in the lucrative obesity drug market. The company, which recently became the first healthcare firm to reach a $1 trillion market capitalization, has reduced the list price of its blockbuster therapy Zepbound to $299 for cash-paying patients.

Market observers view this pricing action as a direct competitive challenge to rivals like Novo Nordisk, as well as a measure to counter providers of compounded mimicry drugs. The objective is to secure volume growth, even if the move may pressure profit margins in the near term.