Shares of Eli Lilly (LLY) are down about 1% in early trading on Dec. 23 on news that archrival Novo Nordisk’s (NVO) new weight-loss pill has received regulatory approval in the U.S.
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LLY stock is trending lower after the U.S. Food and Drug Administration (FDA) approved Novo Nordisk’s new obesity medication, called the Wegovy pill. The approval gives the Danish pharmaceutical concern a head start over rival Eli Lilly in the coveted market for weight-loss pills.
NVO stock is up nearly 10% on the day after securing U.S. regulatory approval for its new weight-loss pill. Management at Novo Nordisk has said that their weight-loss pill should be available in U.S. pharmacies and via telehealth providers in early January, about six months before Eli Lilly’s competing pill is expected to receive FDA approval.
A Gamechanger for Weight-Loss Drugs
Weight-loss pills are expected to be a game changer for the pharmaceutical industry and bring in billions of annual revenues. Currently, weight-loss medications are taken by injection using needles, which are unpopular with many consumers. Taking a pill is expected to be much more palatable to people.
The weight-loss pill approval is positive news for Novo Nordisk after a difficult year. Over the past 12 months, Novo Nordisk has lost market share to Eli Lilly, endured executive changes, struggled with supply shortages, and faced criticism over its global execution strategy.
Despite the big bounce higher on Dec. 23, NVO stock is still down 38% on the year.
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy rating among 21 Wall Street analysts. That rating is based on 19 Buy and two Hold recommendations issued in the last three months. The average LLY price target of $1,135.32 implies 5.56% upside from current levels.
