Eli Lilly (NYSE: LLY) has been posting outstanding financial results over the past few years. The company owes this success partly to its work in the weight-loss market. Eli Lilly’s Zepbound is the leader in this niche and is growing sales rapidly. However, some investors fear that the party won’t last much longer. As new, competing weight loss drugs enter the market, Eli Lilly will lose market share and pricing power, leading to slower sales growth, or so the argument goes. The good news is that Eli Lilly is preparing for that possibility, and part of the company’s strategy is to develop weight loss medicines that cater to nearly every kind of patient. Here’s what investors need to know.
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Something for (almost) everyone
Zepbound was Eli Lilly’s first weight loss drug to earn approval. It’s a highly effective injectable medicine administered once weekly. But some patients don’t like needles. To cater to them, Eli Lilly developed Foundayo, an oral anti-obesity medicine that was approved in April. As the company points out, its strategy has worked: More than 80% of Foundayo prescriptions have been for patients who had never taken GLP-1s before.
In other words, Foundayo helped Eli Lilly expand its market and reach people it otherwise wouldn’t have reached. Retatrutide, Eli Lilly’s next-gen medicine, may do the same. Although Zepbound is effective, retatrutide seems to be even better, based on phase 3 data the company has revealed. Retatrutide also showed strong results in reducing A1C levels in patients with diabetes, while reducing obstructive sleep apnea and knee osteoarthritis pain. Retatrutide won’t replace Zepbound for everyone.
Rather, it will push the weight-loss ceiling higher and be an especially powerful option for patients who need substantially more weight loss or who have obesity-related complications (or both). In fact, even though it isn’t approved yet, Eli Lilly has already granted early access to retatrutide to some people. Eligible patients must be over 18, ineligible for retatrutide clinical trials, have refractory obesity, and have at least two serious or life-threatening obesity-related conditions. This is a market neither Foundayo nor Zepbound can reach.
Elsewhere, Eli Lilly is developing eloralintide, which, unlike its other medicines mentioned so far, isn’t a GLP-1 drug. Eloralintide mimics the action of the amylin hormone, which also helps regulate satiety. What’s the purpose of this drug? Traditional GLP-1s sometimes have significant gastrointestinal-related side effects. But in a phase 2 study, eloralintide posted GLP-1-like weight-loss efficacy numbers with improved tolerability.
