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Lilly Bets on Next-Generation Obesity Drugs to Stay Ahead
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Key Takeaways
Lilly is advancing oral obesity pills and next-gen GLP-1 drugs to stay ahead in weight loss.
LLY's retatrutide showed strong weight loss and osteoarthritis pain relief in phase III studies.
Lilly is testing eloralintide and bimagrumab to expand beyond traditional GLP-1 therapies.
Eli Lilly and Company (LLY - Free Report) is a leader in the fast-growing diabetes and obesity market, driven by its blockbuster tirzepatide-based drugs, Mounjaro and Zepbound. Tirzepatide, a dual GIP and GLP-1 receptor agonist (GIP/GLP-1 RA), remains the foundation of Lilly’s obesity franchise. Beyond obesity and diabetes, Lilly is evaluating tirzepatide in several obesity-related conditions, such as obstructive sleep apnea (OSA), chronic kidney disease, fatty liver disease and cardiovascular conditions.
Mounjaro and Zepbound face strong competition from Novo Nordisk’s (NVO - Free Report) semaglutide medicines, Ozempic, for diabetes and Wegovy for obesity.
Though Lilly and Novo Nordisk presently dominate the market, they are making rapid progress in the development of more potent and convenient GLP-1 as well as non-GLP-1 based candidates in their clinical pipeline to beat future competition. The global obesity drug market is projected to grow dramatically, reaching nearly $95 billion by 2030 and potentially $125 billion by 2035, according to Goldman Sachs estimates, which means competition is inevitable.
Oral Obesity Drugs Could Be a Commercial Game-Changer
Both Lilly and NVO have launched oral GLP-1 pills. Lilly’s Foundayo and Novo Nordisk’s Wegovy pill can prove to be commercial game-changers for the respective companies. Oral pills will be a more convenient alternative to the currently available once-weekly injectable obesity treatments like Zepbound and Wegovy. Oral pills may significantly lower the treatment burden and potentially broaden patient adoption versus injections. Oral pills can also be manufactured at scale to meet global demand, which, in turn, can drive billions in additional sales. Both Lilly and Novo Nordisk said their oral pills witnessed strong launches.
Lilly expects to launch Foundayo in most international markets during 2027. For the type II diabetes indication, Lilly has filed regulatory applications for Foundayoin several countries, while it expects to file the same in the United States in late second quarter. In addition to obesity and diabetes, Lilly is evaluating Foundayo in six phase III studies for other diabetes and obesity-related diseases.
Retatrutide May Succeed Tirzepatide in Lilly’s Portfolio
Lilly is developing several next-generation, more powerful and more convenient GLP-1–based treatments, including oral options and multi-acting candidates. Its obesity and diabetes pipeline has therefore evolved from a traditional insulin and diabetes-drug portfolio into a comprehensive metabolic-disease platform.
A key candidate in its obesity pipeline is triple-acting incretin, retatrutide, being studied in type II diabetes and obesity, along with other indications like OSA, knee osteoarthritis, and chronic low back pain, in late-stage studies. Retatrutide represents a new generation of “triple-action” therapy as it targets three biological pathways — GLP-1, GIP and glucagon — whereas existing medicines mostly act on one or two biological pathways.
Data from a phase III study of retatrutide in obesity and knee osteoarthritis pain showed that the drug led to significant weight loss and substantial relief of osteoarthritis pain. Data from a phase III study in type II diabetes showed that retatrutide can achieve glycemic control comparable to tirzepatide, while providing additional weight loss.
Eloralintide and Bimagrumab Expand Lilly Beyond GLP-1 Therapies
Another key candidate in Lilly’s diabetes/obesity pipeline is eloralintide, a selective amylin receptor agonist. Lilly is exploring eloralintide both alone and in combination with incretin therapies. Phase III studies are ongoing for obesity, OA knee pain and OSA. Lilly believes that eloralintide has the potential to be a great medicine for patients seeking a non-GLP-1-based mechanism due to tolerability issues.
Through its 2023 acquisition of Versanis, Lilly gained bimagrumab, an ActRII inhibitor being studied alone and in combination with tirzepatide to improve body composition by reducing fat while maintaining or increasing lean muscle mass. It is in phase II studies for obesity.
Competition Heating Up in the Obesity Space
Novo Nordisk’s other novel candidate in its obesity pipeline is CagriSema, a once-weekly injection, which is a combination of cagrilintide (amylin analogue) and semaglutide (GLP-1). NVO has already filed a new drug application with the FDA seeking approval of CagriSema for obesity. Other key candidates are cagrilintide, a long-acting amylin analog in phase III, and amycretin, a single molecule combining GLP-1 + amylin, which is expected to enter phase III in 2026.
Several other companies, like Amgen, Viking Therapeutics (VKTX - Free Report) and Structure Therapeutics (GPCR - Free Report) are also making rapid progress in the development of more potent and convenient candidates in their clinical pipeline.
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 fourth 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.
Amgen is developing MariTide, a GIPR/GLP-1 receptor, as a single dose in a convenient autoinjector device with a monthly and possibly less frequent dosing. This key feature differentiates it from Zepbound and Wegovy, which are weekly injections. Amgen has nine global phase III studies underway with MariTide in obesity, type II diabetes and other obesity-related conditions.
LLY’s Stock Price, Valuation and Estimates
Lilly’s stock has declined 7.9% so far this year compared with the industry’s decrease of 4%.
Image Source: Zacks Investment Research
From a valuation standpoint, Lilly’s stock is expensive. Going by the price/earnings ratio, LLY’s shares currently trade at 25.46 forward earnings, much higher than 16.47 for the industry. However, LLY’s stock is trading below its 5-year mean of 34.57.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 has risen from $34.69 to $35.43 per share over the past 30 days, while that for 2027 has risen from $42.98 to $44.26 per share over the same timeframe.
View the Zacks #1 Rank List
Image: Bigstock
Lilly Bets on Next-Generation Obesity Drugs to Stay Ahead
Key Takeaways
Eli Lilly and Company (LLY - Free Report) is a leader in the fast-growing diabetes and obesity market, driven by its blockbuster tirzepatide-based drugs, Mounjaro and Zepbound. Tirzepatide, a dual GIP and GLP-1 receptor agonist (GIP/GLP-1 RA), remains the foundation of Lilly’s obesity franchise. Beyond obesity and diabetes, Lilly is evaluating tirzepatide in several obesity-related conditions, such as obstructive sleep apnea (OSA), chronic kidney disease, fatty liver disease and cardiovascular conditions.
Mounjaro and Zepbound face strong competition from Novo Nordisk’s (NVO - Free Report) semaglutide medicines, Ozempic, for diabetes and Wegovy for obesity.
Though Lilly and Novo Nordisk presently dominate the market, they are making rapid progress in the development of more potent and convenient GLP-1 as well as non-GLP-1 based candidates in their clinical pipeline to beat future competition. The global obesity drug market is projected to grow dramatically, reaching nearly $95 billion by 2030 and potentially $125 billion by 2035, according to Goldman Sachs estimates, which means competition is inevitable.
Oral Obesity Drugs Could Be a Commercial Game-Changer
Both Lilly and NVO have launched oral GLP-1 pills. Lilly’s Foundayo and Novo Nordisk’s Wegovy pill can prove to be commercial game-changers for the respective companies. Oral pills will be a more convenient alternative to the currently available once-weekly injectable obesity treatments like Zepbound and Wegovy. Oral pills may significantly lower the treatment burden and potentially broaden patient adoption versus injections. Oral pills can also be manufactured at scale to meet global demand, which, in turn, can drive billions in additional sales. Both Lilly and Novo Nordisk said their oral pills witnessed strong launches.
Lilly expects to launch Foundayo in most international markets during 2027. For the type II diabetes indication, Lilly has filed regulatory applications for Foundayoin several countries, while it expects to file the same in the United States in late second quarter. In addition to obesity and diabetes, Lilly is evaluating Foundayo in six phase III studies for other diabetes and obesity-related diseases.
Retatrutide May Succeed Tirzepatide in Lilly’s Portfolio
Lilly is developing several next-generation, more powerful and more convenient GLP-1–based treatments, including oral options and multi-acting candidates. Its obesity and diabetes pipeline has therefore evolved from a traditional insulin and diabetes-drug portfolio into a comprehensive metabolic-disease platform.
A key candidate in its obesity pipeline is triple-acting incretin, retatrutide, being studied in type II diabetes and obesity, along with other indications like OSA, knee osteoarthritis, and chronic low back pain, in late-stage studies. Retatrutide represents a new generation of “triple-action” therapy as it targets three biological pathways — GLP-1, GIP and glucagon — whereas existing medicines mostly act on one or two biological pathways.
Data from a phase III study of retatrutide in obesity and knee osteoarthritis pain showed that the drug led to significant weight loss and substantial relief of osteoarthritis pain. Data from a phase III study in type II diabetes showed that retatrutide can achieve glycemic control comparable to tirzepatide, while providing additional weight loss.
Eloralintide and Bimagrumab Expand Lilly Beyond GLP-1 Therapies
Another key candidate in Lilly’s diabetes/obesity pipeline is eloralintide, a selective amylin receptor agonist. Lilly is exploring eloralintide both alone and in combination with incretin therapies. Phase III studies are ongoing for obesity, OA knee pain and OSA. Lilly believes that eloralintide has the potential to be a great medicine for patients seeking a non-GLP-1-based mechanism due to tolerability issues.
Through its 2023 acquisition of Versanis, Lilly gained bimagrumab, an ActRII inhibitor being studied alone and in combination with tirzepatide to improve body composition by reducing fat while maintaining or increasing lean muscle mass. It is in phase II studies for obesity.
Competition Heating Up in the Obesity Space
Novo Nordisk’s other novel candidate in its obesity pipeline is CagriSema, a once-weekly injection, which is a combination of cagrilintide (amylin analogue) and semaglutide (GLP-1). NVO has already filed a new drug application with the FDA seeking approval of CagriSema for obesity. Other key candidates are cagrilintide, a long-acting amylin analog in phase III, and amycretin, a single molecule combining GLP-1 + amylin, which is expected to enter phase III in 2026.
Several other companies, like Amgen, Viking Therapeutics (VKTX - Free Report) and Structure Therapeutics (GPCR - Free Report) are also making rapid progress in the development of more potent and convenient candidates in their clinical pipeline.
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 fourth 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.
Amgen is developing MariTide, a GIPR/GLP-1 receptor, as a single dose in a convenient autoinjector device with a monthly and possibly less frequent dosing. This key feature differentiates it from Zepbound and Wegovy, which are weekly injections. Amgen has nine global phase III studies underway with MariTide in obesity, type II diabetes and other obesity-related conditions.
LLY’s Stock Price, Valuation and Estimates
Lilly’s stock has declined 7.9% so far this year compared with the industry’s decrease of 4%.
From a valuation standpoint, Lilly’s stock is expensive. Going by the price/earnings ratio, LLY’s shares currently trade at 25.46 forward earnings, much higher than 16.47 for the industry. However, LLY’s stock is trading below its 5-year mean of 34.57.
The Zacks Consensus Estimate for 2026 has risen from $34.69 to $35.43 per share over the past 30 days, while that for 2027 has risen from $42.98 to $44.26 per share over the same timeframe.
LLY’s Zacks Rank
Lilly has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.