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Summary
- The US Food and Drug Administration granted breakthrough designation status for an Alzheimer's disease drug.
- Earlier on June 7, Biogen's Aduhelm was granted the breakthrough status by the Food and Drug Administration for Alzheimer's disease.
- Find out more about this company in this article.
Stocks of Eli Lilly and Company (NYSE:LLY, LLY:US) surged nine per cent and were trading at US$ 237.31 at 10 AM EDT, on Thursday, June 24. The surge came after Eli Lilly's experimental drug for Alzheimer's disease was given breakthrough status by the US Food and Drug Administration (FDA).
The drug manufacturer gained investors' attention as the breakthrough status means that the drug's approval process will speed up now. However, this does not imply that the FDA will approve the company's drug for Alzheimer's.
Earlier on June 7, Biogen's ADUHELM™ was granted the breakthrough status by the Food and Drug Administration, and controversy erupted over the move. Meanwhile, Lecanemab, another drug by Biogen Inc (NASDAQ:BIIB), got the same designation on Wednesday, June 23. L
Although human trials showed the effectiveness of ADUHELM™, critics say that the US$ 56,000 annual price for the drug is excessive. Interestingly, the drug by Eli Lilly works on the same principle as Adhuhelm.
Eli Lilly's (NYSE:LLY) stock performance
Outperforming the S&P 500 Index's relative growth of 0.6 per cent in the past year, the LLY stock soared by 36 per cent. Meanwhile, the share prices returned 40 per cent to the stockholders year-to-date (YTD).
One-year chart of stock performance, volume and multiple moving average of Eli Lilly (Source: EODHD/Others)
Presently, the drug maker's stock carries a dividend yield of 1.6 per cent and pays US$ 0.85 per unit as a quarterly dividend to the shareholders. The dividend growth was at the rate of 11.6 per cent in the last three years.
Holding a market cap of US$ 227.6 billion, Eli Lilly offers a 13.9 per cent return on assets, and its debt-to-equity ratio is 2.35, based on the TMX data.
Financial performance of Eli Lilly (LLY)
In Q1 2021, Eli Lilly recorded a worldwide revenue of US$ 6.8 billion, representing an increase of 16 year-over-year (YoY). The increase in revenue was due to a significant increase in volume and the favourable impact of foreign exchange rates.
According to the company's full-year guidance, Eli Lilly expects to clock a total revenue of US$ 27.6 billion and estimates its operating margin to be approximately 26 per cent in 2021.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view. The reference data in this article has been partly sourced from EODHD/Others.
