Global Courant
Eli Lilly surpassed investors’ super-high expectations at this week’s American Diabetes Association conference, cementing its leadership in metabolic medicine and prompting Wall Street analysts to rethink their sales forecasts. Across the board, analysts said the news is likely to support Lillto y shares, which are already up more than 26% this year. At least one analyst thought the news was strong enough to immediately revise its long-term sales forecast. The updates include new data from phase 2 trials of weight loss drugs of forglipron, an oral GLP-1 receptor agonist, and retatrutide, a next-generation triagonist that combines three incretin hormones GLP-1, GIP, and glucagon. Analysts were encouraged by the findings of both early stage studies. In the case of orforglipron, overweight or obese patients could eventually have an easier way to take a GLP-1 medication. At the moment, those drugs are usually administered via a weekly injection. Even more impressive were the results of the retatrutide trial, which raised the bar for efficacy. Patients in the study lost an average of more than 24% of their starting weight at the end of 48 weeks. What’s more, some showed no signs of their weight loss slowing down, suggesting they could continue to lose pounds. These drugs may add to the success Lilly is already seeing with tirzepatide, a GLP-1 drug already approved for the treatment of type 2 diabetes under the brand name Mounjaro. The drug is expected to be approved as a weight loss treatment by the end of the year, joining Novo Nordisk’s Wegovy and Ozempic in the market. (Both use semaglutide, but Ozempic is marketed as a type 2 diabetes treatment, while Wegovy is primarily for weight loss.) All-time high During Tuesday trading, Lilly’s shares reached an all-time high of $467 .98 intraday before closing 2.6% at $464.65. Earlier in the day, Barclays analyst Carter Gould raised his price target for Lilly’s stock from $420 to $500, implying a 10% gain from Monday’s closing price. Gould now expects Lilly’s incretin drug portfolio to reach $49 billion in sales by 2030, compared to a previous range of $38 billion to $40 billion. “In practice, we are now modeling the rise of Mounjaro, as well as subsequent equity shifts to these next-wave assets over the 2H of the decade, with Mounjaro peaking at ~$27.7 billion in 2028, as we track the next-wave modeling that will reach $32 billion by 2030 and $42 billion by 2032,” Gould wrote in a research note. “We forecast that the total portfolio of Mounjaro + Orforglipron + Retatrutide will reach $48-49 billion over the period 2030-2032, with prices declining.” Gould said orforglipron appears to be a “best-in-class” oral drug. Many analysts consider an oral GLP-1 drug useful for patients who do not want to give themselves an injection. Analysts also say an oral drug will help ease supply bottlenecks that have been a problem in the category. Bank of America’s Geoff Meacham said retatrutide “exceeded expectations” for weight loss. He noted that most of the other studies involved a larger number of women, who tended to lose a greater percentage of weight during the study. “This is important because while the overall weight loss of 22.4% was impressive, the weight loss was 21.9% and 28.5%, respectively, looking at men and women separately, with the slope in women not yet stabilizing.” 100% of patients lost ≥ 5% and 26% of patients lost ≥ 30% of their weight, which we would classify as pretty impressive,” Meacham said, reiterating his Buy rating for Lilly and $500 price target. Also noteworthy in the retatrutide trial was the more than 5% typical reduction in liver fat in a subset of patients with nonalcoholic fatty liver disease, the analysts said. “Given these results, we believe that retatrutide could play a role in the pre-fibrosis NASH market (which largely overlaps with the drug’s major obesity/T2D indications),” JPMorgan analyst Chris Schott wrote in a research note. Schott also described the weight loss as “impressive” and said it will likely compare favorably with Novo’s next-generation drug CagriSema, which is expected to show more than 25% weight loss when it releases its next update. Forming as a duopoly Several analysts said the market appears to be forming into a duopoly of Novo and Lilly. BMO Capital Markets analyst Evan David Seigerman expects Lilly to dominate the market into the 2030s. He estimates the Indianapolis-based drugmaker is outperforming with a $505 price target. “These data puts Lilly firmly in the lead of the ‘metabolic revolution’ driven by incretin therapy,” Seigerman wrote. “We’re modeling Lilly’s broader GLP-1RA+ franchise as a >$50 billion opportunity for the metabolic franchise, including Mounjaro with a benefit from the retatrutide (triple-G) and oral drugs (anchored by orforglipron),” he continued. “These data validate our proposition of continued dominance, and what appears to be a broadening addressable market, options that can drive access and extend treatment duration.” Morgan Stanley analyst Terence Flynn, who has a $507 price target on Lilly stock, said he models oral GLP-1 orforglipron and retatrutide (GGG) launches in 2026 and 2027, respectively. —Michael Bloom of CNBC contributed to this report.
