Lilly CEO Buys $1 Million of Stock After Share-Price Drop on Obesity Drug Data

Eli Lilly CEO David Rick and other executives purchased stock on Tuesday. (Paulo Nunes dos Santos/Bloomberg)

Eli Lilly CEO David Ricks bought just over $1 million of Lilly shares in the open market Tuesday following the sharp drop in the stock in the wake of its earnings report last week.

Ricks purchased 1,632 shares for an average price of $644.77 on Tuesday, according to a Form 4 report filed with the Securities and Exchange Commission late Tuesday. The buy was his first in the open market since 2019, Bloomberg data show.

Other Lilly insiders purchased stock on Tuesday, including Executive Vice President Daniel Skovronsky.

The purchases by the Lilly brass are a signal that they view the stock as attractively priced following a 14% decline in the wake of the second-quarter earnings report on Aug. 7. The shares rose 0.7% Tuesday to $639.43, but are down from $746 before the earnings announcement.

The stock is up 0.9% to $645.17 in Tuesday’s after-hours session.

Investors were disappointed by the data about Lilly’s weight-loss pill orforglipron, now in Phase 3 clinical trials, and the amount of weight loss that users experienced while taking the drug. Investors have been excited about the prospect of a weight-loss pill since existing GLP-1 drugs are injectable, and a pill would greatly expand the market.

Lilly’s fortunes are tied closely to its weight-loss drugs, and their success has driven up its stock in recent years.

In the wake of the recent earnings news and update on the obesity pill, JPMorgan analyst Chris Schott called the selloff a “compelling entry” point on the stock in a client note and reiterated an Overweight rating with an $1,100 price target.

The stock, he noted, was trading at 27 times projected 2025 earnings and 20 times estimated 2026 profits, which he called an “attractive entry point” for a company that he believes can generate “high teens (annual) EPS growth through at least the early 2030s.”

Lilly’s CEO seems to agree.

Write to Andrew Bary at andrew.bary@barrons.com