Is The OpenAI, Eli Lilly Partnership A Gamechanger?

It’s the latest in a string of pharma/AI marriages. Pharmaceutical giant Eli Lilly (NYSE: LLY) has announced a groundbreaking partnership with OpenAI. The hope is to harness AI technology to develop new drugs to combat antimicrobial resistance (AMR), a pressing global health concern. Pathogens rapidly evolve, making them increasingly resistant to current treatments. Because of this, AMR poses a significant threat. The partnership between Eli Lilly and OpenAI represents a strategic approach to accelerate drug discovery and address this critical issue.

Recent studies have shown promising results for AI-discovered drugs, with success rates of 80-90% in Phase 1 clinical trials. This suggests that the integration of AI in pharmaceutical research could revolutionize the drug development process.

News Comes At A Big Moment

As of early March, the company had an almost $740 billion market cap, putting it at the top of big pharma for market capitalization. How has the company achieved this? Its recent success is due in part to its promising diabetes drug, Mounjaro^®, and weight loss treatment, Zepbound^®, both of which have been awarded FDA approval. The company’s early Alzheimer’s treatment, Donanemab, also shows promise but is awaiting regulatory approval.

Other highly successful products from Eli Lilly include diabetes drugs Jardiance and Trulicity and the anti-depressant drug Cymbalta. In the 1940s, Eli Lilly was one of the earliest companies to mass-produce penicillin. Fast-forward 80 years, its three new drugs indicate the potential for future growth. The company’s latest ambitious goal is to create new antibiotics by 2030.

By The Numbers

In its latest quarterly results, Eli Lilly reported $8.77 billion in revenue, a year-over-year rise of 25.98%. Its net income was up 66.77% to $2.24 billion, and diluted EPS was 2.48, up 66.44% YoY. Eli Lilly’s net profit margin was 25.58%, up 32.4%.

Market analysts maintain a bullish outlook on Eli Lilly stock. The company has seen substantial growth, with its stock price increasing by over 55% year-to-date. Following the partnership news, LLY stock rose to $904.61, up from its $890.11 close the previous day. Currently, it’s trading at around $909. The consensus rating among 23 analysts is a Strong Buy with a $889.41 price target and a high estimate of $1,015.

Neither Dilantha DeSilva nor Stocks.News have positions in this company.