Eli Lilly and Company (NYSE:LLY) was among the stocks on which Jim Cramer gave his opinion, as he warned that increased AI-related spending might cause near-term headwind for stocks. Cramer noted that the company’s GLP-1 franchise is the best, as he said:
CEO David Ricks is a terrific steward of his shareholders’ capital. Still, at the end of the day, the thesis here boiled down to the simple fact that Lilly’s got the best GLP-1 franchise… In the last two weeks, though, we’ve gotten some major bullish catalysts from Eli Lilly… First, on May 21st, Lilly reported new data from a Phase 3 trial… The data from this trial showed Retatrutide is much more effective for weight loss than the GLP-1s that we currently have… But an unspoken part of the story, and this is, you know, I gotta be really careful here because they’ve not been approved for this, right, it’s about muscle atrophy.
The big problem with GLP-1s is that they make you lose both muscle and fat. There’s been a lot of speculation that Retatrutide will help you lose more fat and less muscle… But that’s why so many people are taking it in the gray market… It’s telling that there’s so much demand for something that isn’t even out yet. It could be the biggest drug of all time. You heard me, biggest drug of all time. The key is that, at least so far, no one else has a weight loss drug in the pipeline that’s in the same league as what Lilly’s working on.
Second positive development, on May 25th, Lilly announced some positive Phase 1… trial results for a new gene therapy that they’re testing on high cholesterol. But get this, very early stage data, the drug showed promising results for lowering LDL cholesterol, which is the bad kind of cholesterol… I’m calling that incredible. Basically, these results make the goal of a one-time treatment for high cholesterol look more realistic… Third, the very next day after that promising gene therapy data, Lilly announced that it was acquiring three vaccine makers in one fell swoop… In short, Lilly’s making a big initial push into vaccines, an area where it doesn’t have a major presence at the moment…
Finally, here’s some more good news: on May 28th, we learned that Lilly reached a deal with CVS Caremark, the largest pharmacy benefit manager in the US, to cover both Zepbound and Foundayo, their two big weight loss drugs… Here’s the bottom line… It’s made a big comeback in recent weeks, driven by real positive catalyst, not just sentiment. That’s why I’m sticking with Eli Lilly for the long haul, especially during times when tech’s a tither.
Photo by Adam Nowakowski on Unsplash
Eli Lilly and Company (NYSE:LLY) develops and markets medicines for diabetes, obesity, oncology, immunology, neuroscience, and other chronic conditions.
While we acknowledge the risk and potential of LLY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LLY and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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