Eli Lilly (LLY) is making headlines with the recent approval of its new weight-loss drug, Zepbound, by the Food and Drug Administration. This drug, based on the same medication used in Lilly’s diabetes treatment Mounjaro, mimics two gut hormones (GLP-1 and GIP) to improve feelings of satiety, regulate blood glucose levels, and slow down stomach emptying. With the approval of Zepbound, Eli Lilly now directly competes with Novo Nordisk, the manufacturer of semaglutide-based weight-loss drug Wegovy.
While Novo Nordisk’s Wegovy is priced at $1,056 per month, Eli Lilly is offering Zepbound at a 20% discount. This competitive pricing strategy may lead to better insurance coverage and increased patient uptake. According to Leerink Partners analyst David Risinger, the availability of a discounted weight-loss drug could have a significant impact on the market dynamics.
In terms of stock performance, Eli Lilly is forming a flat base, with its shares currently trading above the 50-day moving average. MarketSmith.com suggests a buy point at $629.97, with Friday’s high point offering an early entry opportunity for investors.
Although the focus is currently on Zepbound and its potential sales, Eli Lilly has a robust pipeline of late-stage assets. The company expects the FDA’s approval decision for donanemab, its Alzheimer’s treatment, in the first quarter, while also awaiting regulatory review for an eczema drug. Furthermore, Eli Lilly is conducting clinical trials for drugs targeting prostate and breast cancer, Crohn’s disease, diabetes, and weight loss. Investors are particularly interested in retatrutide, an experimental obesity treatment that targets three gut hormones.
Despite concerns about supply constraints for diabetes and weight-loss drugs, analysts remain optimistic about Eli Lilly’s financial performance. Sales for Mounjaro are expected to skyrocket by 841% to $4.55 billion this year, while Zepbound is projected to generate $75 million in sales in its debut year. Looking ahead, analysts anticipate a nearly 5,000% increase in Zepbound sales, reaching $3.79 billion next year.
Q: How does Eli Lilly’s new weight-loss drug work?
A: Zepbound, the weight-loss drug developed by Eli Lilly, mimics two gut hormones (GLP-1 and GIP) to improve feelings of satiety, regulate blood glucose levels, and slow down stomach emptying.
Q: How does Zepbound compare to Novo Nordisk’s weight-loss drug, Wegovy?
A: Zepbound is being offered at a 20% discount compared to Novo Nordisk’s Wegovy, which may lead to better insurance coverage and increased patient uptake.
Q: What are some other late-stage assets of Eli Lilly?
A: Eli Lilly is working on several late-stage assets, including drugs for Alzheimer’s, eczema, prostate and breast cancer, Crohn’s disease, diabetes, and weight loss.
Q: What is the projected sales growth for Eli Lilly’s weight-loss drugs?
A: Analysts expect a significant increase in sales for both Zepbound and Mounjaro, with Zepbound projected to achieve nearly $3.79 billion in sales next year.