Ely Lilly claims it could seek government approval for LY-CoV555 by the end of 2020. Ely Lilly researchers created LY-CoV555 by cloning antibodies from people who recovered from coronavirus infections. The hope is that LY-CoV555 will make people immune to COVID-19.

The 144-year-old American pharmaceutical house Ely Lilly and Co (NYSE: LLY) is attracting attention with an experimental coronavirus treatment.

Ely Lilly is conducting a Phase 3 trial of an experimental antibody drug for COVID-19 in nursing homes. Yahoo! News reports Ely Lilly is testing LY-CoV555 in volunteers in coronavirus-infected nursing homes, care homes for our British friends.

Ely Lilly claims it could seek government approval for LY-CoV555 by the end of 2020. Ely Lilly researchers created LY-CoV555 by cloning antibodies from people who recovered from coronavirus infections. The hope is that LY-CoV555 will make people immune to COVID-19.

The US National Institutes of Health (NIH) is conducting two trials of LY-CoV555, CNBC reports. One trial will test LY-CoV555 on people with mild-to-moderate coronavirus symptoms. The other will test people hospitalized by coronavirus. The goal of the Phase 3 trials is to see if LY-CoV555 patients can go home to recover.

Can Ely Lilly make money from Coronavirus?

Coronavirus treatment is a growth industry. Worldometers recorded 40,964 fresh coronavirus cases and 1,057 COVID-19 deaths in the USA on 5 August 2020.

Globally, there have been 18.874 million coronavirus cases and 702,139 coronavirus deaths so far, Worldometers estimates. In detail, there were 6.105 million coronavirus cases worldwide on 3 August 2020. Of those cases, 65,482 roughly 1% were critical, Worldometers estimates.

Hence, there were 65,750 potential users for LY-CoV555 on 3 August 2020. Thus, there is a growing need for LY-CoV555 or something similar.

Moreover, governments will pay for most coronavirus treatments. Hence, Ely Lilly will get paid for LY-CoV555. For example, the conservative Trump administration in the United States will pay for the treatment of uninsured COVID-19 patients, The Washington Post claims.

Is Ely Lilly Making Money?

Ely Lilly (NYSE: LLY) is making money. Ely Lily reported a quarterly gross profit of $4.277 billion on revenues of $5.499 billion on 30 June 2020.

However, those numbers fell from $5.86 billion in quarterly revenues and $4.645 billion in quarterly gross profit on 31 March 2020. In addition, Ely Lilly’s quarterly operating income fell from $1.59 billion on 31 March 2020 to $1.97 billion on 30 June 2020. Finally, Ely Lilly’s quarterly common net income fell from $1.457 billion on 31 March 2020 to $1.412 billion on 30 June 2020.

In contrast, Ely Lilly is generating more cash. For instance, Ely Lilly’s quarterly operating cash flow grew from $382 million on 31 March 2020 to $2.495 billion on 30 June 2020. However, Ely Lilly’s quarterly ending cash flow fell from $1.699 billion on 31 March 2020 to $666.1 million on 30 June 2020.

I think the ending cash flow fell because Ely Lilly’s quarterly financing cash flow fell from $106.7 million on 31 March 2020 to -$1.673 million on 30 June 2020. Hence, Lilly was spending its cash to pay the debt, which is responsible.

What Value Does Ely Lilly Have?

Lilly (NYSE: LLY) has value in the form of $2.388 billion in cash and short-term investments and total assets of $41.967 billion on 30 June 2020.

Importantly, LY-CoV555 shows Ely Lilly has impressive research and development capabilities. To explain, I think Lilly could develop more coronavirus drugs for which demand is increasing.

Beyond LY-CoV555, Ely Lilly is a large manufacturer of insulin, the usual treatment for diabetes. Diabetes is a growing problem in the United States.

For instance, the American Diabetes Association (ADA) estimates 34.2 million Americans or 10.5% of the US population had diabetes in 2018. Additionally, the ADA estimates that 1.5 million Americans receive diabetes diagnoses each year.

Moreover, the United States spent $217 billion on diabetes treatment in 2017, the ADA estimates. Hence, diabetes is a growing market for which Lilly offers a treatment.

Is Ely Lilly a Good Stock?

Ely Lilly (NYSE: LLY) is a growth stock. Mr. Market paid $132.12 for Lilly shares on 2 January 2020. That share value grew to $154.34 on 5 August 2020.

Thus, Ely Lilly’s share price is growing with the coronavirus pandemic. Hence, Lilly could be a growth stock for our age.

Ely Lilly will pay a 74₵ quarterly dividend on 13 August 2020. That dividend grew from 64.5₵ on 14 November 2019. Thus, Ely Lilly’s dividend grew by 9.5₵ in the past year.

Overall, Eli Lilly offered a $2.96 annual dividend and a 1.94% annualized dividend. In addition, Dividend.com credits LLY with a 41.66% payout ratio on 5 August 2020.

If you are looking for growth and dividend stock suited to the terrible time in which we are living, Eli Lilly is an interesting choice. In conclusion, I think a company with a proven coronavirus treatment could make money. However, Eli Lilly’s coronavirus treatment LY-CoV555 is unproven.

 Originally published at https://marketmadhouse.com on August 5, 2020.

 

 

0 Comments

Leave a reply

Your email address will not be published. Required fields are marked *

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.

The US National Institutes of Health (NIH) is conducting two trials of LY-CoV555, CNBC reports. One trial will test LY-CoV555 on people with mild-to-moderate coronavirus symptoms. The other will test people hospitalized by coronavirus. The goal of the Phase 3 trials is to see if LY-CoV555 patients can go home to recover.
FacebookTwitterGoogle+

©  2024 STERLING GLOBAL GROUP INC.

CONTACT US

We're not around right now. But you can send us an email and we'll get back to you, asap.

    Your Name (required)

    Your Email (required)

    Your Subject (required)

    Your Message

    Log in with your credentials

    Forgot your details?