Shares of Eli Lilly (LLY) are down 15% in early trading on Aug. 7 after the pharmaceutical giant announced trial results for its highly anticipated weight-loss pill that disappointed Wall Street.
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Eli Lilly reported that the highest dose of its daily obesity pill helped patients lose 12% of their body weight, or roughly 27 pounds, at 72 weeks in a late-stage trial. While that finding paves the way for the weight-loss pill to be approved by regulators and enter the market, it was nevertheless a disappointment.
Wall Street analysts who cover Eli Lilly had been looking for 13% to 15% weight loss among patients in the trial. Some doctors also noted the number of patients on the highest dose of the weight-loss pill who discontinued using it due to side effects that include nausea, vomiting, and diarrhea.
Mixed Reactions
However, not every doctor or analyst criticized the trial results. Several doctors lauded the data and stressed the potential of the weight-loss pill to reach new patients who are afraid of needles, which is how Eli Lilly’s Zepbound medication is administered. Eli Lilly estimates there are around 170 million people who could benefit from its weight-loss drugs.
The trial results for the weight-loss pill were announced alongside strong quarterly results from Eli Lilly. The pharma company announced a beat and raise quarter driven by a 172% year-over-year sales increase in its Zepbound weight-loss medication. Eli Lilly surpassed Wall Street forecasts across the board with its second-quarter print.
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 17 Buy and three Hold recommendations issued in the last three months. The average LLY price target of $1,016.69 implies 32.74% upside from current levels. These ratings are likely to change after the company’s financial results.
