The notion of a weight loss drug was a fantasy of many for a long time. But now, thanks to drugmaker Eli Lilly (LLY), it’s a real thing. However, Lilly wasn’t the only one looking to land market share in a market that was previously thought of as the stuff of dreams, and one new competitor is on the rise. This sent Lilly shares down nearly 3% in Wednesday afternoon’s trading.
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The big new concern for Eli Lilly is Roche (RHHBY), which revealed that its new obesity drug candidate cleared early-stage trials and produced some exciting results. Roche’s drug, CT-996, was tested on obese patients who didn’t also have Type 2 diabetes. The result was a “placebo-adjusted average weight loss” of 6.1% over four weeks.
Perhaps even more compelling is that while Lilly’s Zepbound and Novo Nordisk’s (NVO) Wegovy are injections, Roche’s drug is a pill. That’s going to make it especially attractive, particularly to patients who aren’t exactly happy about injections. The only downside, though, is that Roche warned it could be “several years” before its drug is ready, and Lilly and Novo Nordisk may well strengthen their hold on the market in the meantime.
Churning Out Peptides
Thankfully, that’s not the only arrow in Eli Lilly’s quiver. A report notes that Eli Lilly has a critical advantage over other firms in the industry: peptide production (short chains of amino acids, which are the building blocks of proteins). In fact, Eli Lilly’s focus on “high-throughput peptide manufacturing” has drawn a lot of industry interest.
The company’s soaring peptide production has helped fuel its growth in the GLP-1, or weight loss, drug market by allowing it to keep up with demand. In fact, Lilly’s production capability here is so respected that it will be landing an award at the upcoming 2024 Facility of the Year Awards Banquet and Awards Celebration at the 2024 ISPE Annual Meeting and Expo.
Is Eli Lilly a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on LLY stock based on 17 Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 104.81% rally in its share price over the past year, the average LLY price target of $927.72 per share implies 1.23% upside potential.
