Morgan Stanley sees Eli Lilly shares rallying on data showing heart benefit of Novo's obesity drug
Danish drugmaker Novo Nordisk 's promising data on its obesity drug Wegovy should benefit Eli Lilly 's pipeline and its stock, according to Morgan Stanley. Shares of Novo Nordisk soared 15% in early trading Tuesday after late-stage trial data showed that Wegovy reduced the risk of major cardiovascular events, such as heart attacks or strokes, by 20%, compared with a placebo. "This is above our expectations and our prior analysis," Morgan Stanley analyst Terence Flynn said.
The analyst said Eli Lilly's stock could rally at least 5% on this news as the positive data could pave the way for more insurance coverage of obesity treatments already in the Indianapolis drugmaker's pipeline. "We expect LLY shares to trade up > 5%, given this data should continue to build the case for broader insurance coverage of obesity drugs, such as LLY's Mounjaro, where a separate Ph3 outcomes trial is ongoing," Flynn said.
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