Eli Lilly, the pharmaceutical giant, secured an important victory in the intensifying war against diabetes and obesity.
Earlier this month, the drugmaker confirmed that the U.S. Food and Drug Administration (FDA) had approved Foundayo (orforglipron), a once-daily oral GLP-1pill for chronic weight management in adults with obesity and overweight conditions.
The approval, which came ahead of the anticipated April 10 Prescription Drug User Fee Act (PDUFA) date, has sent ripples across investors, as it puts Lilly on par with Novo Nordisk, which launched Wegovy, a weight-management injection, earlier this year.
The favorable decision has given the pharmaceutical giant a new tool in the booming market for GLP-1 treatments, currently a very lucrative category in the drugmaking industry.
And they are already available for prescription, for now only through LillyDirect.
Wall Street sees a major growth driver
Wall Street analysts said the approval largely came as anticipated, even if ahead of schedule.
In a note shared with TheStreet, Bank of America said the approval strengthens Lilly’s position, noting that the regulatory decision arrived slightly ahead of their expectations, and that the drug’s label appeared in line with investor expectations.
The firm reiterated its buy rating on Eli Lilly and slightly increased its price target to $1,294 from $1,293.
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The firm also said the drug could become the “preferred oral GLP-1 offering on ease-of-use,” considering that there are no food effects or dosage restrictions.
Analysts at Morgan Stanley echoed this, saying that the no-food-or-water restriction could make the pill easier for patients to take than injectable GLP-1 therapies.
“With Foundayo, we now have an oral option that delivered an average of 12.4% weight loss at the highest dose in clinical trials — addressing both the clinical realities of obesity and the practical challenges patients face every day,” said Dr. Deborah Horn, director of the Center for Obesity Medicine at McGovern Medical School at UTHealth Houston.
With this new win in Lilly’s pocket, analysts see the near-term investor focus on Foundayo’s script trajectory, along with any discernible impacts on the drugmaker’s other weight management drug, Zepbound.
TheStreet/Eli Lilly & Company
Foundayo pricing strategy targets broader access
Lilly knows that greater access and effective pricing could play an important role in how quickly Foundayo gains traction among patients, considering that Novo Nordisk’s Wegovy is already a steady competitor in the weight-loss market.
With this in mind, Lilly is trying to make the pill accessible and affordable. People with insurance can pay $25 per month to access the pill, while those opting for self-pay will pay $149 per month for the lowest dose.
Prices can rise up to $349 per month for higher doses, and those enrolled in Lilly’s Journey Program will pay $299 per month at the highest doses. Eligible Medicare Part D individuals can also get Foundayo for $50 per month as early as July 1, 2026.
Morgan Stanley estimates the drug could generate roughly $1.2 billion in U.S. sales in 2026 and reach as much as $29 billion by 2035, depending on how quickly prescriptions ramp up after launch.
Bank of America, on the other hand, estimates that Foundayo will generate $2 billion in revenue in 2026 as the launch progresses.
And Lilly is not behind. It stated its plan to begin shipping Foundayo shortly after the regulatory decisions are made.
Initial shipments began on April 6, with prescriptions accepted immediately through LillyDirect and available shortly thereafter through retail pharmacies and telehealth providers.
For BofA, Foundayo will be a preferred product, and the slightly better pricing will offset the benefit Novo Nordisk’s Wegovy gained from being the earlier entrant in the weight-loss market.
GLP-1s reshaping obesity market
GLP-1s are a class of medications used to treat type 2 diabetes. While the drugs lower blood-sugar levels, they also suppress appetite, reducing calorie intake. They have become a more popular option to treat obesity and manage weight gain.
This approval comes at a timely moment, as demand for GLP-1 drugs continues to grow rapidly. The market is also continuously expanding, with the latest entry being Novo Nordisk’s generic version of weight-loss drugs entering the Indian market.
“Fewer than 1 in 10 people who could benefit from a GLP-1 are taking one, held back by access, stigma, perceived complexity, or the belief that their condition isn’t serious enough for treatment,” Eli Lilly CEO David Ricks said.
He added that Foundayo can level the playing field for those dealing with “obesity or who are overweight and living with weight-related complications.”
The medication also gives patients more choices, leveling the playing field in terms of price competition.
Research from JPMorgan revealed that global demand for GLP-1s is expected to grow significantly, driven by lower prices, seniors gaining access to obesity drugs, and the approval of oral GLP-1s. “GLP-1s are expected to open a new frontier for potential users, including those hesitant to use injectable options,” it said.
While currently only 7% of diabetes patients and 2% of those with obesity use these medications, two major factors could increase supply and may increase demand.
- The introduction of oral pills will increase convenience.
- Patents for GLP-1s are set to expire in densely populated countries, including China, India, Brazil, Canada, and Turkey.
The research estimates that more than 30 million Americans could be on GLP-1 treatment in 2030, a 10 million increase from 2026.
With these data and a new FDA approval in hand, Eli Lilly is advancing its portfolio and taking the lead in the weight-loss industry.
It has already become the first health care company to reach a $1 trillion market cap, and with lower drug prices and new options, investors are looking forward to its growth trajectory.
The company stock was up over 2% on Wednesday, April 8, but remains down 11% year to date.
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