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Jim Cramer Holds Eli Lilly Shares Despite Record Rally
Jim Cramer stated he will not sell Eli Lilly shares despite their sharp rise. The company's new obesity data and expanding drug portfolio have raised investor expectations.
Jim Cramer said he maintained his position in Eli Lilly shares despite them reaching record levels. Cramer described the surge as "parabolic" but announced he would not realize the gains.
The company's shares traded at all-time highs during the day following data shared at the American Diabetes Association conference in New Orleans on the next-generation obesity drug retatrutide. Notably, about 19% weight loss was achieved with the lower 4 milligram dose of the drug, attracting investor attention.
Retatrutide Data Boosts Interest
Retatrutide stands out as a similar injectable treatment to Eli Lilly’s existing obesity drug Zepbound. While Zepbound acts through two hormones, retatrutide features a triple mechanism of action, including glucagon.
Competitor Novo Nordisk’s Wegovy targets only GLP-1. The report also notes that Lilly’s weight loss pill Foundayo has made a strong start.
Cramer expressed the view that Lilly has overtaken its competitors in the obesity market. The company’s shares have gained about 8% since the beginning of the year, while Novo Nordisk’s shares have fallen approximately 18% in the same period.
Analysts’ Expectations Grow
Goldman Sachs described Lilly’s obesity portfolio as a "rapidly evolving next-generation innovation engine." Barclays argued that retatrutide pushes the boundaries of what is possible in obesity treatment.
The company’s growth potential is not seen as limited to weight loss alone. Data suggesting GLP-1-based drugs may also benefit sleep apnea, cardiovascular diseases, and possibly Alzheimer’s keep investor interest alive.
Cramer highlighted this broad potential, stating the drugs could contribute not only to weight loss but also to other health issues. He noted that effects on sleep apnea, heart health, and blood pressure could become even more apparent.
Criticism of Employers and Insurers
Cramer also criticized some employers and insurance companies for narrowing coverage of GLP-1 treatments due to high costs. He argued these companies overlook the long-term health benefits.
Sending the message that "cutting back here is wrong," Cramer said there are many other areas to save costs, but these treatments should not be among them. Eli Lilly’s strong position with investors was also highlighted alongside this assessment.
The report also shared that Jim Cramer’s Charitable Trust holds a long position in Eli Lilly shares.
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