02 June 2020

Eli Lilly Assumes a Lead in the Covid-19 Cure Race


News shaping
the markets today


What’s happening: Eli Lilly & Co reported on Monday that it has initiated an early stage trial for its experimental coronavirus antibody treatment.

What happened: The Indianapolis, Indiana-based company is one of many drug-makers investing heavily into developing vaccines and antivirals to combat the covid-19 pandemic, which has already claimed more than 370,000 lives globally.

Eli Lilly is working on developing an antibody therapy that has the potential to both prevent and treat the rapidly spreading coronavirus infection. This is a first-of-its-kind study for an antibody treatment for covid-19.

Apart from news of the potential coronavirus treatment, the drug-maker also made some positive announcements about other drugs that it is currently working on.

Why it matters: Eli Lilly reported that the early stage study for its LY-CoV555 treatment will monitor safety and efficacy levels in covid-19 patients. The company had partnered with privately held AbCellera Biologics in March to develop its experimental treatment for the coronavirus.

Management said the results from the trial are expected by the end of June. Eli Lilly is optimistic about this drug candidate moving to the next phase of testing, which aims to study its treatment in non-hospitalised patients suffering from the infection. For this, the drug candidate needs to show adequate safety levels.

Meanwhile, the company has already started manufacturing this potential therapy on a large scale. “If LY-CoV555 becomes part of the near-term solution for covid-19, we want to be ready to deliver it to patients as quickly as possible, with the goal of having several hundred thousand doses available by the end of the year,” said the company’s chief scientific officer, Dr. Daniel Skovronsky.

Rival Regeneron Pharmaceuticals is also aiming to begin a clinical trial for its antibody cocktail treatment for the coronavirus infection in June and is planning to make doses available in the market by the end of August.

Apart from covid-19 related news, Eli Lilly has recently announced the FDA (Food and Drug Administration) approval for its cancer drug, Cyramza (ramucirumab). The drug-maker’s Taltz injection for the treatment of active non-radiographic inflammatory arthritis has also been approved by the FDA.

Eli Lilly had raised its 2020 profit forecast in late April after beating earnings expectations for the prior quarter.

How the shares responded: Eli Lilly’s shares rose slightly during regular trading on Monday but gave up gains towards the end of the day to settle lower by 0.3%. The stock has declined around 0.8% over the past month.

What to watch: Investors will keep an eye on any progress made by the company to move its antibody treatment for coronavirus to the next phase. News of stronger financials following FDA approvals for two other drugs will also boost investor sentiment.

The Markets Today


Investors will be focusing on US stocks today, after the country’s markets closed modestly higher in the previous session.

Context: US stocks closed in positive territory on Monday, after recording losses earlier in the trading session. Markets were propelled by optimism around an economic recovery, which overshadowed worries of the weekend protests.

Details: Investors were hopeful of the worst of the coronavirus outbreak being over. The hopes overshadowed concerns over National Guard units being deployed in certain cities to control the protests against police brutality towards African Americans following the death of George Floyd.

Meanwhile, the US reported an increase in the ISM (Institute for Supply Management) manufacturing index to 43.1 in May, from an 11-year low of 41.5 in the previous month.

After recording a gain of 4.3% in May, the Dow rose around 92 points to settle at 25,475 on Monday. The S&P 500 gained 0.4% to 3,055.73, while the Nasdaq 100 rose 0.7% to finish at 9,552.05.

Shares of Pfizer declined by more than 7% on Monday after the drug-maker announced the discontinuation of trial for its breast cancer treatment. Coty’s shares spiked over 20% after the company announced plans to sell a major stake in its beauty and retail haircare units to KKR & Co.

In other news, WTI (West Texas Intermediate) crude for July slipped 0.1% to end at $35.44 a barrel on Monday, while August gold fell $1.40 to settle at $1,750.30 an ounce.

What to watch: Investors will continue to monitor coronavirus numbers, with total infections exceeding 6,273,400 globally. The US has so far confirmed over 1,811,270 cases with around 105,140 deaths.

The economic calendar is light today, with the US expected to release the Redbook index and ISM New York current business conditions index. The latter index had tumbled to 4.3 in April, from a reading of 12.9 in March.

Other Markets: European indices were trading higher at 9am GMT, with the FTSE 100, German 30 and French 40 up by 0.4%, 2.6% and 0.9%, respectively.

Support & Resistances
for Today


market snapshot


Futures at 0400 (GMT)

What else to watch today


Russia’s business confidence as well as the US API crude oil stock change.


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