Solid accounts for Eli Lilly, but Trump's policy weighs on medicines and cures

How so? To understand this, it is necessary to recall some mechanisms that characterise the medicine business in America. First of all - it should be noted - medicines tend to cost far more in the US than in other advanced states. In the face of this, the White House has (again) focused on the so-called 'most favoured nation price'. Put differently: drug prices in America should align with the lowest prices in other developed countries. In this context, the companies - which have been at the centre of controversy for years - that end up in the White House's crosshairs are above all - and precisely - the PBMs. These are companies that act as intermediaries between drug manufacturers, insurance companies and pharmacies. For example: they create forms for medicines covered by policies or negotiate discounts with pharmaceutical companies. Well: it is precisely these discounts - which end up in the pockets of the PBMs (and not in those of the patient) and constitute a sort of commission - that actually drive up the final price of the drug. Thus, on the one hand, Trump seems to want to hit the middlemen; and, on the other, to favour direct sales to patients by pharmaceutical companies. On closer inspection, this would be an environment - favoured by the US pharma lobby itself - in which manufacturers such as Eli Lilly - according to various analysts - would not face any major difficulties. Nevertheless, the group's securities (like those of other companies) have suffered on the stock market. The reason? Because, first of all, such a reform will have to overcome many obstacles - including procedural ones - in order to actually be applied. And, then, because - together with the issue of tariffs on imports - it opens up unexplored scenarios that may impact the industry's business. In view of this, it is not surprising that Eli Lilly has not escaped the downward pressure. True! The group - which has said it wants to strengthen production in the US by building four new sites - is the big pharma whose EPS will be least impacted by tariffs, according to Ubs. That said, however, it is well known: when there is general uncertainty, corporate stories fall into the background and sales overwhelm everything and everyone.

But it is not just a question of fundamentals or news flows. Another relevant aspect is the portfolio of medicines and their sales. The group, with regard to the first quarter of 2025, points to the positive dynamics of the franchise based on the molecule Tirzepatide which is effective against both diabetes and excess weight. In the first case, we are talking about the medicine called Mounjaro whose global turnover rose 113% to $3.84 billion. In the second, however, we are on the side of Zepbound. This, in the US, achieved sales of 2.31 billion, up from 517.4 million twelve months earlier. The increase was driven by higher demand, partially offset by lower average selling prices. Verzenio also performed well in the oncology sector, with revenues up 10% in the first quarter. Are these trends likely to continue in general? Answering such questions is always - beyond the company's statements - complex. Zepbound, for instance, is within the tough battle in the field of weight loss. An area where there is not only competition from Novo Nordisk but also the arrival of Amgen's drug is awaited. Also important in pharma is the progression of the product portfolio and the progress of the various clinical trials. In this sense - among other things - it can be noted that - in the wake of the incretin exploitation strategy - Eli Lilly announced in April positive preliminary results in Phase 3 for Orforglipron against type 2 diabetes.

So far, some suggestions on the prospects, opportunities, drug development and risks of the Eli Lilly business. What, however, is the stock's situation on the stock market? 'From a technical analysis point of view,' explains Silvio Bona, an independent expert, 'the stock, in the period from roughly 2015 to 2018, was marked by a phase of significant accumulation. Subsequently, having broken through the resistance in the $90 area, the shares initiated a long-term bullish trend that is still in force today'. That said, 'since July 2024,' says Bona, 'the company has been moving in a sideways channel between the ceiling around $970 and the "built" floor at around $700'. At present, 'although the medium-term positioning remains positive, we must pay attention to the static support - always in the medium term - in the $690 area'. A level that coincides with the trend line passing through the minimum realised in 2020. "In the event that the stock should break this support," Bona concludes, "the focus must be first on the 630 level, and then on the level around $540.

Stock performance