Eli Lilly Stock Surges as New Weight-Loss Drug Receives FDA Approval
Eli Lilly (LLY) stock has been making waves in the market after the Food and Drug Administration approved the pharmaceutical company’s new weight-loss drug, Zepbound. This exciting news has propelled shares to form a new flat base, offering potential entry points for investors.
The innovative weight-loss drug, Zepbound, works by mimicking two gut hormones known as GLP-1 and GIP. This helps improve feelings of satiety, markers of blood glucose, and slows the emptying of the stomach. Zepbound is based on the same drug, tirzepatide, found in Lilly’s diabetes treatment Mounjaro.
With the approval of Zepbound, Lilly is now directly challenging Novo Nordisk, a rival pharmaceutical company that sells its drug semaglutide as Ozempic and Rybelsus for diabetes treatment, as well as a weight-loss drug called Wegovy. However, Zepbound is offered at a 20% discount to Wegovy, giving Lilly a competitive edge in terms of pricing and potentially better insurance coverage.
In the third quarter, Mounjaro, the diabetes treatment behind Zepbound, saw massive sales growth of 652% year over year, indicating strong demand for the product. However, both Eli Lilly and Novo Nordisk are facing supply constraints for their new diabetes and weight-loss drugs, and are working to expand production to meet growing demand.
Alongside their weight-loss drugs, Lilly has several late-stage assets in their pipeline, including an Alzheimer’s treatment and an eczema drug under regulatory review. Additionally, the company is working on new approaches to treating prostate and breast cancer, Crohn’s disease, diabetes, and obesity.
Investors are taking note of Eli Lilly’s strong performance, with the stock boasting a top 10% Composite Rating, indicating solid fundamental and technical performance. With the anticipation of continued growth driven by its innovative drugs, Eli Lilly is positioning itself as a key player in the pharmaceutical industry.
As Zepbound inches closer to its market debut, analysts project significant growth potential for the drug, forecasting $75 million in sales this year and $3.79 billion in sales next year. Despite its late launch, Zepbound is expected to make a substantial impact in the weight-loss drug market.
In the coming weeks, investors will closely monitor the stock as it forms a new flat base, providing an early entry point for those looking to capitalize on the exciting developments at Eli Lilly. As the pharmaceutical company continues its innovation in the field of healthcare, the stock is expected to remain in the spotlight for the foreseeable future.