Eli Lilly Stock (LLY) Falls 5% After FDA Delays Decision on Weight-Loss Pill

The stock of pharmaceutical giant Eli Lilly (LLY) is down 5% on news that the U.S. Food and Drug Administration (FDA) has delayed a decision on whether to approve the company’s new weight-loss pill.

Specifically, the FDA has delayed its decision on the company’s weight-loss pill called Orforglipron until April 10 of this year. The pharmaceutical regulator had previously been expected to make a decision on the obesity treatment by late-March.

Eli Lilly’s weight-loss pill was part of the Trump administration’s fast-track review program for medications, which promised decisions within one or two months for a limited number of drugs considered critical to U.S. public health or national security.

Why the FDA Delay Matters

The FDA delay is bad news for Eli Lilly as it gives archrival Novo Nordisk (NVO) more time to gain market share in the weight-loss pill category. The FDA approved Novo Nordisk’s weight-loss oral medication, called the Wegovy pill, for the U.S. market late last year and the company has been aggressively rolling it out in recent weeks.

Weight-loss pills are widely expected to be a game changer for Eli Lilly and Novo Nordisk. Most weight-loss medications are taken by injection and pills are expected to be more palatable to the public, especially for people who are afraid of needles. The market for weight-loss pills has been forecast to reach more than $150 billion in annual sales within 10 years.

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 18 Buy and two Hold recommendations issued in the last three months. The average LLY price target of $1,192.17 implies 16.91% upside from current levels.

Read more analyst ratings on LLY stock