Deutsche Bank on Eli Lilly (LLY): 'CB-1 Appetite Suppression Looks Underwhelming'

Deutsche Bank analyst James Shin reiterated a Buy rating and $1,025.00 price target on Eli Lilly (NYSE: LLY).

The analyst comments "Ph2a results from NVO's monlunabant (CB-1) look underwhelming and in our view, removes the threat of a large well-capitalized, small-molecule competitor to LLY's orforglipron. Ph2a results for CB-1 in obese patients demonstrate a ~5.8% placebo-adjusted weight loss at 16 weeks for the 10mg dose. Notably, 20mg & 50mg doses of monlunabant were also investigated in this Ph2a, however the PR notes limited additional weight loss was seen at these higher doses. Recall, monlunabant previously achieved ~3.8% risk-adjusted weight loss at 4 weeks at 25mg dose from Ph1b study. This looks underwhelming relative to LLY's Ph2 orforglipron trials which showed placebo-adj 16-week weight loss up to ~6.5% (in obese w/T2D) and ~7% (just obesity). In our view, this removes an overhang for LLY's small molecule based oral orforglipron which has key Ph3 readouts slated for 2H25. Neuro side effects still exist even at lower doses of monlunabant. Novo said that the most common adverse events from the Ph2a trial were gastrointestinal, with neuropsychiatric side effects, primarily anxiety, irritability, and sleep disturbances, being mild to moderate. Importantly, the PR seems to suggest monlunabant did not have the suicide risk that plagued other previous CB1's. That's said, we await more data as Novo plans to initiate a larger Ph2b of monlunabant in obesity in 2025 to further investigate dosing and safety over a longer duration. Our EU colleague, Emmanuel hinted NVO was cautious on monlunabant's safety given the large Ph2b."

For an analyst ratings summary and ratings history on Eli Lilly click here. For more ratings news on Eli Lilly click here.

Shares of Eli Lilly closed at $915.04 yesterday.

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