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Eli Lilly Stock Rockets As The First Weight-Loss Pill Looms Big

April 19, 2025

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Eli Lilly (LLY) stock jetted higher Thursday after the company said its diabetes and weight-loss pill helped patients lose up to 16 pounds over the course of 40 weeks.

The news solidifies Lilly’s lead in developing an oral treatment for obesity. It also comes less than a week after Pfizer (PFE) scrapped development of its own late-stage obesity pill after one patient experienced a potential drug-induced liver injury. Pfizer is still testing a daily pill called PF-07976016.

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Importantly, Evercore ISI analyst Umer Raffat said, there were no liver safety signals in Lilly’s study.

“Look at how LLY CEO spoke about the data — and mentions safety first: ‘meets our expectations for safety and tolerability, glucose control and weight loss, and we look forward to additional data readouts later this year,’ ” Raffat said in a client note.

Eli Lilly stock rocketed 14.3%, closing at 839.96. Shares have been trading tight following a 21% pullback from early March highs. Lilly stock rose nearly 33% in 2024, despite a fourth-quarter pullback.

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A1C, Weight-Loss Improvements

It’s important to note that the study was completed in patients with type 2 diabetes and inadequate blood sugar levels despite diet and exercise alone. But the news still bodes well for Lilly’s efforts to test the pill, orforglipron, in patients with obesity.

After 40 weeks of taking orforglipron daily, patients experienced an average 1.3% to 1.6% reduction in their A1C, a marker of glucose over time. More than 65% of patients reached an A1C of 6.5% or lower, which is below the American Diabetes Association’s threshold for diabetes.

Lilly noted that A1C reduction was consistent with injectable drugs in the same GLP-1 class. Drugs in this class mimic the GLP-1 hormone to curb hunger and improve blood sugar markers.

At the highest dose, patients lost 7.9% of their body weight, equating to an average of 16 pounds. The weight-loss also hasn’t plateaued, meaning patients could still lose more weight with longer treatment.

“I think Lilly had done a very good job educating the Street on 2 key things: primary endpoint is only at week 40 (i.e., not out to later timepoints like obesity ph 3s) … and that it’s a diabetes trial so you wouldn’t expect high weight loss,” Raffat said.

Viking Reverses While Novo Slumps

William Blair analyst Andy Hsieh expects injectable drugs in the same class to continue dominating the market for weight-loss drugs in higher-income countries.

“However, for middle- or lower-income countries, where access to healthcare could present as a barrier, an oral option that does not require refrigeration could emerge as the most optimal solution,” he said in a report to clients.

Lilly’s data and Pfizer’s dropout are likely to bolster Structure Therapeutics (GPCR), which is working on a slew of weight-loss pills. Structure shares launched 17.4% to 21.76 in response.

Viking Therapeutics (VKTX) shares initially tumbled, but later reversed for a 1.4% gain to 23.94. Viking is working on injectable and oral weight-loss drugs and is often seen as a potential takeover candidate. A five-month decline had left the stock down 71% since October.

Novo Nordisk (NVO), which is testing out a weight-loss pill called amycretin, lost 7.6%, closing at 58.08. BMO Capital downgraded shares from outperform to market perform and lowered the price target 39%, blaming Lilly’s Phase 3 results.

Side Effects Are Key

Notably, side effects also improved in Lilly’s study. In Phase 2 testing, 21% to 35% of patients had vomiting. That came down to 7% to 14%, depending on the dosage, with slower titration. Titration is how quickly patients go up in dosage. Rates of diarrhea also appeared to slow in the late-stage study.

“Overall, the data is an impt milestone in the next generation of GLP-1s,” Evercore’s Raffat said.

He rates Eli Lilly stock as in line.

Leerink Partners analyst David Risinger notes the next orforglipron results are expected in the third quarter. Eli Lilly is testing the drug in patients with obesity but not diabetes. The 72-week study will be key to clinching approval as a weight-loss treatment.

He called the results in diabetic patients “picture-perfect” and reiterated his outperform rating on Eli Lilly stock.