Truist: 'Defending Lilly: LLY strong position helps guard their share in a crowded GLP-1 landscape'

Truist Securities analyst Srikripa Devarakonda reiterated a Buy rating and $1,281.00 price target on Eli Lilly (NYSE: LLY).

The analyst comments "LLY already has a broad footprint in the obesity landscape - With what we believe to be the best drug incretin currently and an increasing uptake trend as indicated by scripts + strong data from Retatrutide + additional life cycle management strategies from LLY. We expect LLY to remain the market leader in the obesity space. We model WW peak Lilly revenues from obesity of 78B vs. $43B cons in year 2036E (our model terminal year). LLY's manufacturing capacity is unlikely to be matched - We note that LLY has been investing significant amount of capital into expanding their manufacturing capacity and has indicated potential to treat a significant proportion of obese patients with their drugs including oral Orforfglipron which is under regulatory review with approval anticipated in 2Q26. Orfoglipron clinical data comparable oral semaglutide; additionally, recent maintenance study data (showing weight change +0.9kg when switched from injectable Wegovy to Orforglipron and +5.0kg when switched from injectable Zepbound to Orforglipron, which was comparable to net maintenance of weight loss vs. PBO) shows potential for the drug to be used as a maintenance therapy following initial weight loss with more potent drugs + reaching goal weight. Investor questions on risk of compounded version of Orfor could be made available. While we have received questions around whether there is a risk of compounded versions of Orforglipron being marketed by HIMS as well, we note online sources indicate the composition of matter patent expiration is 2037. Based on the legal action LLY took against compounding pharmacies in the wake of compounded TZP (example), we expect LLY will likely look to intensely defend its IP. NVO reaction. Today, Reuters is reporting that "Novo Nordisk will take legal and regulatory action to protect patients, our intellectual property and the integrity ⁠of the U.S. gold-standard drug approval framework". TrumpRx. We also note that Novo Nordisk and Lilly have announced deals with the USGov to sell these drugs at a lower price through TrumpRx and some could argue anything that has the potential to impact this channel could be scrutinized by the current administration. Recap: weight loss of Orforglipron versus high-dose (25-mg) oral semaglutide. In Orfo's Ph3 ATTAIN-1 trial (obesity, non-diabetes), Orforglipron resulted in change in body weight from baseline at Week 72 of -11.5% pbo-adjusted (-12.4% vs. -0.9% pbo) vs. 25-mg semaglutide (Ph3 OASIS-4) that showed -11.4% pbo-adjusted weight loss at Week 64 (−13.6% vs. −2.2% pbo). Rates of common adverse events were nausea (33.7% Orfo 36-mg vs. 46.6% 25-mg sema) and vomiting (24.0% Orfo 36-mg vs 30.9% 25-mg sema)."

For an analyst ratings summary and ratings history on Eli Lilly click here. For more ratings news on Eli Lilly click here.

Shares of Eli Lilly closed at $1107.12 yesterday.

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