On Monday, shares of Eli Lilly increased 1.32% to $77.12 in afternoon trading. The shares rose after announcement made by the company that it would carry out late-stage studies with Pfizer (PFE) for their drug, tanezumab. The decision was taken by the company after the Food and Drug Administration decided to lift the partial hold on the trials of these kinds of drugs.
The FDA stopped testing of the chronic pain treatment and also on the ones, which work by blocking a protein called nerve growth factor on account of nervous system complications. Researchers observed these issues while testing the drugs on animals.
Eli Lilly will be paying Pfizer $200 million as the decision will lead to further development of tanezumab. According to analysts at Cowen, Tanezumab could generate annual sales of $100 million by 2020, if it is approved.
According to TheStreet Ratings Team, "We rate LILLY & CO a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover".
It was further said that the company's strengths have been observed in many areas like its good stock price performance, excellent financial position with reasonable debt levels, return on equity and increasing profit margins.
LLY's share price has soared by 25.69%, compared to its closing price one year ago, beyond the performance of the broader market during the same time period. The current debt-to-equity ratio, 0.52, is low and is under the industry average and it indicates that there has been solid management of debt levels.