Eli Lilly: Profits Remain Strong
At Eli Lilly, many investors are keeping an eye on news regarding weight-loss injections. And there is certainly a lot happening here. The pharmaceutical company has received approval for its obesity drug in tablet form and has generated initial revenue of nearly USD 100 million. According to management, there has been virtually no cannibalization of sales from its own weight-loss injections. In addition, the company has invested in its pipeline through acquisitions in recent months, and production is being significantly expanded. Eli Lilly is investing an additional USD 4.5 billion in its facilities in the state of Indiana.
In terms of the numbers, there was little to complain about in the second quarter. The two main revenue drivers remain Mounjaro (type 2 diabetes) and Zepbound (obesity), which already account for two-thirds of the company’s total revenue. Revenue rose by 48% to USD 22.97 billion between April and the end of June. This was more than 10% above Wall Street’s consensus estimate. Adjusted earnings per share improved by one-third year-over-year to USD 8.38, significantly exceeding expectations. This was achieved despite the costs associated with the acquisitions. Management has raised its forecast for fiscal year 2026. Accordingly, revenue guidance has been increased from a maximum of USD 85 billion to between USD 85 billion and USD 87 billion. Bottom line, the company now aims to reach USD 35.50 to USD 36.50 per share.
Eli Lilly shares had only just crossed the USD 1,000 mark this spring. It is now trading 19% higher. The market celebrated the quarterly results with a 5% gain. The vast majority of analysts continue to recommend buying the stock. Citibank has set the highest price target at USD 1,600. The share price is also supported by generous cash inflows. Eli Lilly’s free cash flow in the first half of the year came in at a whopping USD 10.76 billion—more than six times as much as in the previous year. As a result, the company repurchased shares worth approximately USD 4 billion in the first six months. The ongoing buyback program covers an additional USD 7 billion.
BioNxt Solutions: A Drug Film Instead of Injections and Tablets
BioNxt Solutions is one of those overlooked healthcare stocks on the market. The German-Canadian company develops so-called sublingual drug films. This allows patients to receive medication without relying on injections or tablets. Since they are absorbed through the oral mucosa, the effectiveness of many drugs increases significantly. It also offers logistical advantages, as some peptide therapies require a continuous cold chain. A thin film is stable and dry, which saves both time and money.
The advantage becomes clear for people with multiple sclerosis. Due to difficulty swallowing, they can take tablets only with great difficulty or not at all. BioNxt Solutions’ active ingredient oral dissolvable films (ODF) solve this problem—and they do not even require water. In addition, tablets must pass through the stomach and liver before reaching the bloodstream. Some of the drug’s potency is thereby lost along this long path. With the oral dissolvable thin film approach, the active ingredient dissolves directly in the mouth and enters the bloodstream through the oral mucosa. This can result in the need for lower doses of the active ingredient.
To keep costs low, BioNxt Solutions is focusing on testing the thin film with established medications. This avoids the high and often risky research costs commonly associated with biotechnology. BioNxt is currently developing a GLP-1 active ingredient film with a German partner. This is based on the now-famous weight-loss drugs, such as Ozempic and Wegovy. The company is thus targeting an extremely large and profitable healthcare market. In addition, the company is preparing for a human bioequivalence study with cladribine (BNT23001) for multiple sclerosis.
BioNxt Solutions is currently valued at just around EUR 26 million on the stock market. The share price has halved since the start of the war in the Gulf and now appears to be bottoming out. This currently presents an attractive opportunity for small-cap investors willing to accept the associated risks.
Moderna: Breakthrough in Influenza
Progress in medicine continues unabated. Thanks to BioNTech and Moderna, mRNA technology led to the development of the first vaccines during the COVID-19 pandemic. Now, Moderna has succeeded in obtaining approval from the US Food and Drug Administration (FDA) for mFLUSIVA, the world’s first mRNA-based vaccine against seasonal flu (influenza). The target group consists of adults aged 50 and older who are to be protected against seasonal flu. Previous flu vaccines were mostly based on inactivated viruses, which are laboriously grown in chicken eggs or cell cultures. The new mRNA vaccine can be adapted much more quickly to currently circulating virus variants as needed. The approval itself is based on a Phase 3 trial involving over 40,000 participants. For the 65+ age group, accelerated approval was granted based on immunogenicity data. In Europe, the European Medicines Agency (EMA) in Amsterdam is currently reviewing corresponding marketing authorization applications for mRNA flu vaccines as well as for combination vaccines against the flu and COVID-19.
Moderna’s shares had already reacted in early June, rising at times from around EUR 50 to more than EUR 80 within a few weeks. During this period, the positive FDA advisory panel opinion was published ahead of the decisive advisory meeting on the approval of mFLUSIVA. The reports were surprisingly positive and raised no serious concerns, which boosted the share. Since then, this gain has largely been given back. Evidently, many investors quickly took profits, which is no surprise given this sharp short-term rise.
Despite the approval success, analysts are divided on Moderna shares. The market consensus price target is roughly at the stock’s current level! However, the range is enormous. Some analysts see significant value in the company’s oncology pipeline. Piper Sandler, for example, believes prices above USD 100 are possible. On the other hand, the high cash burn resulting from ongoing research and development costs is being criticized. However, Moderna’s coffers are still well-stocked. Management expects cash reserves of more than USD 4.5 billion by year-end.
Since the success of its weight-loss injections, Eli Lilly has been the undisputed star of the pharmaceutical industry. High profits, strong growth, ambitious price targets, and share buybacks are driving its performance. For many professionals, the stock is an integral part of a quality portfolio. With BioNxt Solutions, a genuine, still largely undiscovered small-cap stock awaits investors. The German-Canadian company could break into a mass market with its thin-film technology. Its low market capitalization leaves significant room for growth. Moderna has proven its capabilities with its new flu vaccine. Similar to the German company BioNTech, however, the big business opportunities lie in the field of oncology. A breakthrough here would take the stock to an entirely new level.
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