New pills doing the trick? Eli Lilly’s oral weight-loss drug sparks stock rally
Eli Lilly stocks displayed a major rise after the announcement of a new oral weight-loss drug that has put pressure on its rival pharmaceutical companies
Eli Lilly’s stock surged 16% after the company announced Phase 3 trial results for its oral weight-loss drug, Orforglipron, positioning it as a potential competitor to injectable treatments. Meanwhile, rival Novo Nordisk’s shares dropped sharply.
Why is Eli Lilly's stock price surging?
Eli Lilly’s shares (LLY) skyrocketed 16% on Thursday, making it the top performer in the S&P 500, after the company released positive clinical trial data for its experimental oral weight-loss drug, Orforglipron. The first of seven, the Phase 3 trials showed the drug outperformed a placebo in reducing both weight and long-term blood sugar levels (A1C), with stronger results at higher doses. The findings suggest it could rival Lilly’s own injectable treatments, Mounjaro and Zepbound.
"We are pleased to see that our latest incretin medicine meets our expectations for safety and tolerability, glucose control and weight loss, and we look forward to additional data readouts later this year," David A. Ricks, Lilly's chair and CEO, said in a statement.
Does Eli Lilly's drug have side effects?
The latest oral drug’s side effects are like Mounjaro and Zepbound's. Eli Lilly has mentioned common side effects like nausea, indigestion, and diarrhea. These affect 10% to 26% of patients, depending on dosage. Analysts noted the company plans to submit full trial data for peer review and present it at a medical conference later this year. If subsequent trials confirm these results, Eli Lilly aims to seek FDA approval for orforglipron as a type 2 diabetes treatment by 2026, says Investopedia.
The news intensified competition in the weight-loss drug market, where Lilly and Novo Nordisk (maker of Ozempic and Wegovy) dominate. Novo Nordisk’s shares fell 7% following the announcement, reflecting investor concerns about Lilly’s growing edge. Meanwhile, Pfizer recently paused its oral drug trial after a patient suffered a liver injury.
For now, investors are betting on Lilly’s momentum, as the company continues to outpace rivals in one of healthcare’s most lucrative sectors.
