The stock of U.S. pharmaceutical giant Eli Lilly (LLY) is up 3% on news that rival Pfizer (PFE) has ended development of its experimental weight loss pill.
The pill was an oral GLP-1 drug called “Danuglipron” that Pfizer had hoped to bring to market and sell as a daily medication for people struggling with their weight. Pfizer said it is ending work on the pill after a patient experienced a liver injury during the drug’s trial.
Pfizer’s decision to end development of the weight loss pill came after “a review of the totality of information, including all clinical data generated to date.” The company said it remains committed to developing other weight loss medications going forward.
News that Pfizer has dropped out of the race to create a daily weight loss pill has sent shares of both LLY and Novo Nordisk (NVO) higher.
Explosive Market
Currently, Eli Lilly and Novo Nordisk dominate the market for weight loss medications that are taken via a weekly injection. Both companies are also racing to develop a pill version that will be easier for consumers and help boost sales. To date, the only oral GLP-1 drug approved by the U.S. Food and Drug Administration (FDA) is Novo Nordisk’s “Rybelsus,” which is primarily used to treat Type 2 Diabetes.
Some Wall Street analysts forecast that the market for weight loss drugs could be worth more than $150 billion within a decade. Pfizer had previously canceled a different obesity pill back in 2023 after patients who took that drug also experienced liver issues. Pfizer’s efforts to create a weight loss drug come after the decline in sales of its Covid-19 medications. LLY stock is down 2% so far in 2025.
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy rating among 20 Wall Street analysts. That rating is based on 19 Buy and one Hold recommendations issued in the last three months. The average LLY price target of $1,038.21 implies 37.40% upside from current levels.
