On Thursday, BMO Capital Markets maintained its Outperform rating on Eli Lilly and Company (NYSE:LLY) with a steady price target of $1,101.00. The firm's assessment follows the U.S. Food and Drug Administration's (FDA) recent clarification that tirzepatide, a drug developed by Eli Lilly, is no longer listed on the FDA shortage lists. Consequently, compounding pharmacies are restricted from selling compounded tirzepatide products.
According to the FDA's clarification, under Sections 503A/B of the Federal Food, Drug, and Cosmetic Act (FD&C Act), compounded tirzepatide cannot be produced regularly or in significant quantities, effectively barring its commercial production. This development is seen as a positive step for Eli Lilly, particularly for its incretin portfolio, which includes tirzepatide.
BMO Capital's commentary highlighted the significance of the FDA's announcement, indicating a favorable outlook for Eli Lilly's ability to meet current and future demand for tirzepatide. The firm anticipates that Eli Lilly will continue to increase its market share in incretin-related products as the company expands its manufacturing capabilities.
Tirzepatide is part of a class of drugs known as incretins, which are used in the treatment of conditions like diabetes. Eli Lilly's success in ensuring an adequate supply of tirzepatide is expected to bolster the company's standing in the market for these therapeutic products.
The FDA's decision to remove tirzepatide from the shortage list and restrict the sale of compounded versions underscores the agency's recognition of Eli Lilly's capacity to supply the market effectively. This move is likely to reinforce the company's position in the pharmaceutical industry, particularly within the incretin product space.
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