Eli Lilly: Anticipation ahead of the results
It is not always the life-saving drugs that bring in the big money in the healthcare sector. Right now, weight-loss drugs are delighting investors and analysts. Here, the desire for the perfect body dominates, a typical phenomenon of our time.
The biggest beneficiary of this development is Eli Lilly. The US group dominates the market for weight-loss drugs like no other. In the second quarter alone, weight-loss injections and tablets drove a massive 48% increase in revenue to USD 22.97 billion. This exceeded Wall Street analysts’ estimates. Management raised its revenue forecast for this financial year and now expects group-wide revenue of USD 85 billion to USD 87 billion. The Indianapolis-based group’s free cash flow is also impressive, reaching USD 10.76 billion in the first six months, a sixfold increase from the same period last year.
On Thursday, October 29, Eli Lilly will present its third-quarter results. Expectations are high, and analysts are bullish following the forecast upgrade. Once again, the outlook is likely to be decisive. Eli Lilly’s shares had crossed the USD 1,000 mark in the spring. The share price is now another quarter higher and has resumed its upward trend after a brief September weakness. Some of the highest analyst price targets are already in the USD 1,500 to USD 1,600 range.
Formycon: Another success with biosimilars
Generics are now widespread and help lower the cost of medicines. Once patent protection expires, these chemical copies, which are 100% identical to the original drug, can be approved. Alongside them, another class of follow-on drugs is now establishing itself in the markets: biosimilars. These are copies of biologics, medicines produced from living organisms such as yeasts or bacteria. Although they are not absolutely identical to the original, biosimilars demonstrably have the same medical efficacy, safety and quality as the original.
Formycon AG is among the German players in this business. The Munich-based company already has two biosimilars on the market, ranibizumab and aflibercept, which are used in ophthalmology, as well as ustekinumab for chronic inflammatory diseases. A fourth biosimilar could now be approved in the second half of 2027. And this involves one of the largest markets in the world. The active substance FYB206 developed by Formycon is a follow-on version of the cancer drug Keytruda. Keytruda belongs to US pharmaceutical giant Merck & Co. and generated global revenue of USD 16.4 billion in the first half of 2026 alone. Keytruda is used to treat various cancers, such as lung cancer, melanoma, breast cancer, and urological and gynaecological cancers – often in combination with other therapies.
The US Food and Drug Administration (FDA) has now accepted the marketing authorisation application for FYB206 for review. According to the company, this is the first time an application for a Keytruda biosimilar has been publicly accepted. The FDA is expected to decide on the application in the third quarter of 2027. Until then, the company will have to be patient. However, acceptance of the application already triggers a milestone payment. Indian group Zydus Lifesciences holds the commercialisation rights for North America. Following FYB206’s market launch, the southern German company will also receive a share of the gross profit from sales in the US and Canada.
Formycon shares have largely traded within a range of EUR 18 to EUR 20 this year. Analysts see considerable potential for the mid-cap. Berenberg issued a price target of EUR 30, while H.C. Wainwright recently raised its target price from EUR 36 to EUR 42.
GSK attracts with a stable dividend
GSK (GlaxoSmithKline) has also shown considerable resilience in a dynamic market, though its performance has not matched Eli Lilly’s. The stock is currently trading about 15% below its February high.
The British company is also positioned quite differently. On the one hand, GSK focuses on speciality medicines for conditions such as HIV, respiratory diseases and inflammation, and is also active in cancer therapies for the uterus and rectum. Added to this is what is probably the world’s broadest vaccine portfolio.
This year, an acquisition that surprised the markets briefly weighed on the share price. CEO Luke Miels, who has been in office since the start of the year, wants to push further into oncology, which is why the company put a hefty USD 10.6 billion on the table to buy Nuvalent. The US biotech company, with its broad pipeline in non-small cell lung cancer, was worth a 40% premium to the current share price to GSK. The FDA is expected to issue the first approval decisions in the fourth quarter.
In terms of its share price, GSK still has scope to catch up with its competitors. The shares trade at a forward P/E ratio of around 11, putting them well behind the major US competitors. It has not cut its dividend despite the large acquisition. The dividend yield is currently around 3.5%.
Conclusion
With Eli Lilly, investors are backing the fastest-growing blue chip in the pharmaceutical industry. As long as the trend in weight-loss injections continues, the company should meet the high expectations. Formycon is now entering the growth phase with its products and has already submitted its next marketing authorisation application. GSK is a solid dividend payer seeking to grow through acquisitions.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as “Relevant Persons”) may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a “Transaction”). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
For this reason, there is a concrete conflict of interest.
The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.
Risk notice
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.
The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.
Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein. For full disclaimer information, please click here.