Eli Lilly’s Obesity Drug Dominance Still Underpriced By Market, Bank of America Says - Eli Lilly (NYSE:LLY)

Core Viewpoint - Eli Lilly & Co. is positioned strongly in the obesity therapeutics market, with Bank of America highlighting significant growth potential that the market may be underestimating [1][10] Company Performance and Stock Outlook - Bank of America analyst Jason Gerberry maintains a Buy rating on Eli Lilly, slightly adjusting the price target from $1,286 to $1,268, while the stock was trading around $1,055 [1][2] - There is perceived "room for stock upside" as Lilly executes key obesity launches and mitigates risks associated with new therapies [2] Product Launch and Market Readiness - Orfoglipron, Lilly's oral GLP-1 weight-loss pill, is expected to launch in the second half of 2026, following an expedited regulatory review [3] - The oral formulation of Orfoglipron eliminates refrigeration and injection barriers, making it more appealing to patients [3] Revenue Projections - Bank of America forecasts $3 billion in Orfoglipron revenue for 2026, significantly higher than consensus estimates of around $1 billion [4] - For context, Lilly's Zepbound generated approximately $5 billion in U.S. sales in its first full year despite early supply constraints [5] Access and Pricing Strategy - A recent U.S. government agreement allows Medicare and Medicaid beneficiaries to access obesity medications at a fixed net price of $245, translating to about $50 per month for patients [6] - This agreement is viewed as a strategic trade-off that may pressure headline pricing but is expected to drive higher patient volumes [6][7] Long-Term Growth Potential - Lilly's long-term growth story remains intact, with several upcoming data readouts from Phase 3 trials for retatrutide expected to influence future growth [8] - There is particular opportunity in treating "super-obese" patients, which could support high-single-digit billion peak sales [9] Competitive Landscape - Bank of America anticipates that Novo Nordisk's upcoming head-to-head obesity study will show non-inferiority, but it is not expected to significantly impact Zepbound's market position [9] Overall Market Position - Bank of America asserts that Lilly's sales growth trajectory over the next five to seven years supports a premium valuation, driven by leadership in obesity, upcoming oral GLP-1 launches, and expanding access channels [10]