Eli Lilly Positioned To Dominate Obesity Market With Oral Option, Analyst Initiates With Confidence

Cantor Fitzgerald initiated coverage on Eli Lilly And Co LLY on Monday, citing orforglipron data, which strengthens the case for obesity dominance.

Last week, the U.S. drug giant reported topline Phase 3 results from the ACHIEVE-1 trial of orforglipron compared to placebo in adults with type 2 diabetes and inadequate glycemic control with diet and exercise alone.

In the first Phase 3 trial of the ACHIEVE program, orforglipron met the primary endpoint of superior A1C (blood sugar) reduction compared to placebo at 40 weeks, lowering A1C by an average of 1.3% to 1.6% from a baseline of 8.0%, using the efficacy estimand.

After a choppy second half of 2024, “Lilly is off to a solid start in ’25,” Cantor analyst Carter Gould writes. The company reported positive orforglipron ACHIEVE-1 data and improved underlying GLP-1 commercial metrics.

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“…We view the ACHIEVE-1 data as meaningfully de-risking a 13-16% weight loss profile, and if safety/tolerability holds up, it should leave LLY well-positioned to take share from semaglutide and further grow the market with an oral approach,” analyst Gould adds.

Cantor writes that Eli Lilly could have an over 85% share of the obesity market by 2029-2030E when the next wave of entrants hits. Cantor initiated with an Overweight rating and a price target of $975.

Eli Lilly’s first-quarter earnings are in the front row for investors.

The company is scheduled to release the financial performance on 1 May. Analysts expect $4.79 per share earnings with sales of $12.93 billion.

Cantor expects modest beats across Mounjaro/Zepbound and that the company will likely reaffirm the FY25 topline guide ($59-61 billion) as a raise is more likely after the second quarter of 2025.

In March, the company announced the launch of its popular weight loss drug Mounjaro (tirzepatide) in India, which is expected to have the second-largest population of overweight or obese people by 2050.

Rival Novo Nordisk A/S’ NVO is feeling the pressure as it tries to move up the launch of Wegovy in India to better compete with Lilly.

BofA Securities has also made minor changes to its model for Eli Lilly ahead of Q1 earnings.

BofA analyst Tim Anderson writes that IQVIA recently began including Lilly Direct vials in its TRx (total prescription) data. As for pricing, Eli Lilly expects an overall price decline by the mid-to-high single digits in 2025. While this isn’t specific to any product, the company suggests that falling prices for its obesity drugs will likely be a major factor.

For 2025/2026, revenues are changed by +1%/+0.4%, and EPS estimates change by +1.9%/-0.7%. No substantial changes to Mounjaro/Zepbound forecasts.

BofA reiterates the Buy rating with a price target of $1,000. “We continue to like LLY, not “expensive” on a PE-to-growth basis, by our math.”

Price Action: LLY stock is up 0.59% at $822.84 at the last check Tuesday.

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