Stock Market Slump: Should Investors Ditch Eli Lilly and Novo Nordisk Shares?
On a turbulent Tuesday for pharmaceuticals, several stocks took a hit. The disappointing outlook released by Eli Lilly has sent shockwaves through the industry. The company, once poised for a significant revenue boost, now only expects a third more than before, landing around $45 billion for the upcoming year. The high-profile diabetes and weight loss drugs Mounjaro and Zepbound, as well as inventory issues, are largely to blame for the massive downgrade.
Exchange Tumble
By the end of the U.S. trading day on Tuesday, Eli Lilly's stock plummeted approximately 7%. Consequentially, its competitors felt the ripple effect. The Danish giant, Novo Nordisk, lost over 4%. Viking Therapeutics, a dark horse in the market, took a major dive of nearly 13%. Could this be the end of the blockbuster drug era?
Eli Lilly (WKN: 858560)
Investors, don't fret. Eli Lilly projects revenue to reach $58 to $61 billion in the new year, nearly 32% above the midpoint of analysts' forecasts. This promising outlook suggests investor patience may be rewarded. Experts like Goldman Sachs predict the market for weight loss drugs could soar to $100 billion by 2030[1].
Navigating the Landscape
While Novo Nordisk has faced disappointing study data for its new obesity treatment CagriSema, it remains one of the first players in the market. This setback might offer a prime opportunity for investors looking to enter. Caution is advised in this segment, as market unpredictability runs rampant.
Meanwhile, Viking Therapeutics, a clinical-stage biotech with no approved products, is developing promising candidates. The company's significant stock price decline this year underscores the challenges facing this sector. However, if Viking can successfully achieve trial success and secure approvals for its pipeline candidates, substantial upside potential awaits[2][3].
Contains material from dpa-AFX
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Conflict of interest notice The author holds direct positions in the financial instruments mentioned in the publication or related derivatives that could benefit from the price development resulting from the publication: Eli Lilly.
[1] Analysis of Eli Lilly's Market Position
[2] Novo Nordisk's Market Position
[3] Viking Therapeutics' Market Position
- In light of Eli Lilly's stock market decline, investors might find promising opportunities in competitors such as Novo Nordisk, despite its recent setbacks with CagriSema, due to the potential $100 billion market growth for weight loss drugs by 2030 (as predicted by Goldman Sachs).
- Despite the 13% stock price drop this year and current challenges facing Viking Therapeutics, a clinical-stage biotech with no approved products, its pipeline candidates offer substantial upside potential if the company can successfully achieve trial success and secure approvals for its drugs.
