This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
The soaring demand for GLP-1 weight loss drugs is no longer just an American or European phenomenon. As these drugs proliferate through an ever-increasing segment of the globe’s obese population, the GLP-1 heavyweights such as Eli Lilly and Company and Novo Nordisk continue to reap outsized rewards.
The Ozempic effect:
According to Goldman Sachs, the reduction in obesity-related health concerns could boost U.S. GDP by 0.4% to 1% with widespread uptake of weight-loss medications
— Julian Klymochko (@JulianKlymochko) March 3, 2024
GLP-1 drugs can induce significant weight loss by suppressing hunger and regulating the production of insulin and glucose. Eli Lilly and Company currently offers Tirzepatide as one of its proprietary injections-based drugs to combat diabetes and obesity, leveraging both GLP-1 and Glucose-dependent Insulinotropic Polypeptide (GIP) agonists to offer better efficacy. Eli Lilly markets Tirzepatide under the Mounjaro and Zepbound labels, with the former geared toward diabetes and the latter billed as a treatment for obesity.
Eli Lilly and Company has also been working on its injections-based Retatutide offering, which targets three different hunger-regulating hormones to offer better efficacy: GLP-1, GIP, and Glucagon.
However, the company’s holy grail of sorts is the oral GLP-1 drug, Orforglipron, which is set to undergo phase three clinical trials in 2025. As per the results of Orforglipron’s phase two trial data, study participants were able to achieve an average weight loss of between 8.6 percent and 12.6 percent at 26 weeks of treatment.
Eli Lilly and Company’s Share Price Breaches $800 as Its GLP-1 Anti-Obesity Drugs Witness Soaring Demand, Leading to a String of Upgrades From Wall Street
This brings us to the crux of the matter. In today’s pre-market trading session, Eli Lilly and Company’s shares breached the psychologically important $800 price level, constituting a new all-time high. The company currently has a market capitalization that is just north of $750 billion.
Reuters reported last week that Eli Lilly and Company’s Mounjaro GLP-1 offering is currently being scrutinized by India’s health regulatory authorities and that the drug is likely to launch in the world’s most populous market in 2025. Do note that India’s pharmaceutical giants are already developing their own variants of the GLP-1 anti-obesity drugs. Novo Nordisk’s Wegovy is set to launch in India in 2026.
Last week, Bank of America hiked its stock price target for Eli Lilly and Company to $1,000 from $800, constituting a new street-high target. The bank flagged “additional opportunities in heart disease, obstructive sleep apnea, and liver disease” that the pharma giant is poised to tap.
UBS: “.. we see $LLY and Novo increasingly entrenched and maintaining a majority market share with any potential external competition unlikely to be commercially viable until the 2027/28 time frame ..”
Ups $LLY to $910 (prior $810)
— Carl Quintanilla (@carlquintanilla) March 4, 2024
Now, UBS has also increased its target for Eli Lilly and Company shares to $910, citing the company’s “increasingly entrenched” majority market share.