Barclays Maintains an 'Equalweight' on Eli Lilly (LLY); Removal of Legal Overhang Allows for Increased Flexibility on Existing Pipeline
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Price: $1,255.40 +0.88%
Rating Summary:
30 Buy, 5 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
30 Buy, 5 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays maintains an 'Equalweight' on Eli Lilly (NYSE: LLY) price target of $39.00.
Barclays analyst says, "No separation anxiety as both LLY's short-term (2011) and long-term (2012-2014 trough) guidance remains unchanged: With US rights for exenatide to transfer on November 30, 2011 and OUS rights to follow on a market-by-market basis in 2012-2013, it is reasonable to assume there will be a slight depression of revenues amidst this disruption. With regards to the OUS transition over the course of 2012-2013, Amylin (Nasdaq: AMLN) has guaranteed that, up to a total cap of $60M, LLY will not experience losses on exenatide-related activities during that period."
"Revenues will deflate but no overall impact to EPS: Lilly will receive a one-time, upfront payment of $250M which will be amortized over time (the bulk occurring in 2012-2013). AMLN has issued a secured note of $1.2B to LLY on which there is a 9.5% annualized interest rate...Royalties from US revenues will be booked as collaboration revenue while those based on OUS sales will be recorded in other income. We fully expect the declines in revenues to be offset through reductions in marketing spend as well as in further R&D development for the exenatide franchise. LLY currently has no plans to reduce the number of sales representatives as there are other products LLY can use to replace detailing efforts."
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 $38.99 yesterday.
Barclays analyst says, "No separation anxiety as both LLY's short-term (2011) and long-term (2012-2014 trough) guidance remains unchanged: With US rights for exenatide to transfer on November 30, 2011 and OUS rights to follow on a market-by-market basis in 2012-2013, it is reasonable to assume there will be a slight depression of revenues amidst this disruption. With regards to the OUS transition over the course of 2012-2013, Amylin (Nasdaq: AMLN) has guaranteed that, up to a total cap of $60M, LLY will not experience losses on exenatide-related activities during that period."
"Revenues will deflate but no overall impact to EPS: Lilly will receive a one-time, upfront payment of $250M which will be amortized over time (the bulk occurring in 2012-2013). AMLN has issued a secured note of $1.2B to LLY on which there is a 9.5% annualized interest rate...Royalties from US revenues will be booked as collaboration revenue while those based on OUS sales will be recorded in other income. We fully expect the declines in revenues to be offset through reductions in marketing spend as well as in further R&D development for the exenatide franchise. LLY currently has no plans to reduce the number of sales representatives as there are other products LLY can use to replace detailing efforts."
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 $38.99 yesterday.
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