Eli Lilly Drops Despite Positive Lung Cancer Drug Data

The equity is trading near a recent level of resistance

Deputy Editor
Sep 9, 2019 at 9:41 AM
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The shares of Eli Lilly and Co (NYSE:LLY) are down 0.5% at $113.53 this morning, even after data from a recent study showed the pharmaceutical giant's experimental drug LOXO-292 shrank tumors in nearly 70% of patients suffering from advanced lung cancer. The firm plans on applying for U.S. marketing approval by the end of 2019.

Today's drop has LLY stock retreating from its 120-day moving average, which also happens to reside in the $116 region -- an area the stock hasn't closed north of since an early June bear gap. Since hitting a year-to-date low of $105.14 in mid-July, though, the equity has gained 10% atop support its rising 320-day moving average.

The majority of analysts have held out hope for LLY, with seven in coverage calling it a "strong buy," compared to four that have given it a tepid "hold" rating. On the other hand, Eli Lilly's consensus 12-moth target price of $123.83 is at a relatively slim 8% premium to current levels. 

Options traders, however, have been more bearish. LLY sports a 10-day put/call volume ratio of 1.32 on the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 88th percentile of its annual range, hinting at a bigger appetite for long puts over calls of late.

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