We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
LLY Stock Down as FDA Asks for More Safety Data on Oral Obesity Pill
Read MoreHide Full Article
Key Takeaways
LLY stock fell after the FDA requested more safety data on its oral obesity pill Foundayo, post-approval.
FDA flagged risks like liver injury, heart events, and wants long-term thyroid cancer tracking.
Eli Lilly sees Foundayo as a major growth driver which can generate significant sales.
Eli Lilly and Company’s (LLY - Free Report) stock was down around 1.9% on Wednesday in response to a letter from the FDA that instructed the company to “provide additional safety data” on its newly approved oral GLP-1 weight-loss pill Foundayo (orforglipron). The letter mentioned that Lilly should provide more safety data to understand potential risks related to use of the pill, including risks of liver injuries and major adverse cardiovascular events like heart attack and stroke.
Foundayo was approved by the FDA and launched earlier this month and is now widely available via LillyDirect and telehealth platforms as well as across U.S. retail pharmacies. Lilly reportedly claims that in clinical studies, use of Foundayo has not been associated with any drug-induced liver injury.
Oral pills are expected to be a more convenient alternative to the once-weekly injectable GLP-1 obesity treatments like Lilly’s Zepbound and rival Novo Nordisk (NVO - Free Report) Wegovy. Oral pills may significantly lower treatment burden and potentially broaden patient adoption versus injections. They can also be manufactured at scale to meet global demand, which, in turn, can drive billions in additional sales.
In the letter, the FDA also asked Lilly to track cases of a rare type of thyroid cancer in the United States for at least 15 years. Labels of Wegovy and Zepbound carry FDA boxed warnings regarding the risk of developing a rare thyroid cancer. The FDA has also asked for more information about delayed gastric emptying associated with the use of Foundayo.
NovoNordisk had gained approval for an oral version of its obesity drug, Wegovy, in December 2025 and launched the pill in January 2026. However, NVO, in its approval letter for Wegovy, was not asked to provide any additional data on heart risks, liver injuries, or thyroid cancer risks. This is likely because the Wegovy pill contains the same active ingredient — semaglutide — already used in Ozempic and Wegovy injection. In contrast, Foundayo is based on a new drug, orforglipron, which may warrant closer scrutiny.
Lilly’s stock has risen 12.7% in the past six months compared with the industry’s increase of 10%.
Image Source: Zacks Investment Research
Will FDA’s Need for More Data Hurt Foundayo’s Prospects?
Foundayo can prove to be a commercial game-changer for Lilly with the potential to bring in $1 billion-$2 billion in sales as early as 2026. Such post-approval requirements are routine and do not mean that there is any safety issue with the use of Foundayo. However, the FDA’s request for more safety data may affect decision-making among doctors, payers and patients for Foundayo.
In international markets, Lilly expects to launch orforglipron for obesity during 2027. For the type II diabetes indication, Lilly has filed a regulatory application in the EU and plans to file regulatory applications in the United States and other countries later in 2026.
Lilly is also evaluating orforglipron in late-stage studies in other disease areas like obstructive sleep apnea, osteoarthritis pain of the knee, stress urinary incontinence and hypertension. These multiple late-stage studies on orforglipron can expand the candidate’s revenue potential beyond obesity/type II diabetes.
Race to Make Oral Obesity Pill
While Lilly and Novo Nordisk currently dominate the obesity space, smaller biotechs like Structure Therapeutics (GPCR - Free Report) and Viking Therapeutics (VKTX - Free Report) are also developing oral GLP-1 drugs for treating obesity.
Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity. Viking plans to advance oral VK2735 into phase III development for obesity in the third quarter of 2026.
Structure Therapeutics’ phase II ACCESS study on its orally GLP-1 RA, aleniglipron, demonstrated significant weight loss across all doses. Structure Therapeutics expects to initiate the late-stage program of aleniglipron in obesity in the second half of 2026.
View the Zacks #1 Rank List
Image: Bigstock
LLY Stock Down as FDA Asks for More Safety Data on Oral Obesity Pill
Key Takeaways
Eli Lilly and Company’s (LLY - Free Report) stock was down around 1.9% on Wednesday in response to a letter from the FDA that instructed the company to “provide additional safety data” on its newly approved oral GLP-1 weight-loss pill Foundayo (orforglipron). The letter mentioned that Lilly should provide more safety data to understand potential risks related to use of the pill, including risks of liver injuries and major adverse cardiovascular events like heart attack and stroke.
Foundayo was approved by the FDA and launched earlier this month and is now widely available via LillyDirect and telehealth platforms as well as across U.S. retail pharmacies. Lilly reportedly claims that in clinical studies, use of Foundayo has not been associated with any drug-induced liver injury.
Oral pills are expected to be a more convenient alternative to the once-weekly injectable GLP-1 obesity treatments like Lilly’s Zepbound and rival Novo Nordisk (NVO - Free Report) Wegovy. Oral pills may significantly lower treatment burden and potentially broaden patient adoption versus injections. They can also be manufactured at scale to meet global demand, which, in turn, can drive billions in additional sales.
In the letter, the FDA also asked Lilly to track cases of a rare type of thyroid cancer in the United States for at least 15 years. Labels of Wegovy and Zepbound carry FDA boxed warnings regarding the risk of developing a rare thyroid cancer. The FDA has also asked for more information about delayed gastric emptying associated with the use of Foundayo.
NovoNordisk had gained approval for an oral version of its obesity drug, Wegovy, in December 2025 and launched the pill in January 2026. However, NVO, in its approval letter for Wegovy, was not asked to provide any additional data on heart risks, liver injuries, or thyroid cancer risks. This is likely because the Wegovy pill contains the same active ingredient — semaglutide — already used in Ozempic and Wegovy injection. In contrast, Foundayo is based on a new drug, orforglipron, which may warrant closer scrutiny.
Lilly’s stock has risen 12.7% in the past six months compared with the industry’s increase of 10%.
Image Source: Zacks Investment Research
Will FDA’s Need for More Data Hurt Foundayo’s Prospects?
Foundayo can prove to be a commercial game-changer for Lilly with the potential to bring in $1 billion-$2 billion in sales as early as 2026. Such post-approval requirements are routine and do not mean that there is any safety issue with the use of Foundayo. However, the FDA’s request for more safety data may affect decision-making among doctors, payers and patients for Foundayo.
In international markets, Lilly expects to launch orforglipron for obesity during 2027. For the type II diabetes indication, Lilly has filed a regulatory application in the EU and plans to file regulatory applications in the United States and other countries later in 2026.
Lilly is also evaluating orforglipron in late-stage studies in other disease areas like obstructive sleep apnea, osteoarthritis pain of the knee, stress urinary incontinence and hypertension. These multiple late-stage studies on orforglipron can expand the candidate’s revenue potential beyond obesity/type II diabetes.
Race to Make Oral Obesity Pill
While Lilly and Novo Nordisk currently dominate the obesity space, smaller biotechs like Structure Therapeutics (GPCR - Free Report) and Viking Therapeutics (VKTX - Free Report) are also developing oral GLP-1 drugs for treating obesity.
Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity. Viking plans to advance oral VK2735 into phase III development for obesity in the third quarter of 2026.
Structure Therapeutics’ phase II ACCESS study on its orally GLP-1 RA, aleniglipron, demonstrated significant weight loss across all doses. Structure Therapeutics expects to initiate the late-stage program of aleniglipron in obesity in the second half of 2026.
Lilly’s Zacks Rank
Lilly has a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.