Eli Lilly’s (LLY) main competitor in the weight-loss drug category has always been European pharmaceutical giant Novo Nordisk (NVO), the maker of Wegovy. But now, a new competitor has emerged in China.
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Just released clinical trial results for a Chinese weight-loss medication show results that are comparable to Eli Lilly’s blockbuster prescription drug Zepbound that is used to combat obesity. China-based company Hengrui Pharma and its privately held U.S. partner Kailera Therapeutics say that patients lost an average of 18% of their weight over 48 weeks on their weight-loss drug called “HRS9531.”
The results are strong and have raised concerns that Eli Lilly and its Zepbound weight-loss drug could be disrupted by China’s booming and fast-growing biotechnology industry. The Hengrui Pharma weight-loss drug results were not quite as good as Eli Lilly’s Zepbound, which led to 21% weight loss among patients in a late-stage trial. But they were good enough to raise alarm bells.
Growing Competition
Hengrui Pharma says that it plans to seek regulatory approval for its weight-loss drug in China only “as soon as possible” based on the late stage clinical trial results. The Chinese drug doesn’t pose an immediate threat to Eli Lilly. But Kailera, the U.S. company that licensed the rights to HRS9531 outside of China, thinks they may be able to show it works better than Zepbound in their own upcoming trials.
Eli Lilly isn’t taking the challenge lying down. The Indiana-based company is in late stage trials with a weight-loss pill that is highly anticipated by both analysts and consumers. And Eli Lilly is also developing Retatrutide, a follow-up weight-loss drug that reportedly works better than Zepbound. Still, some analysts say that competition in the weight-loss drug category is likely to grow more intense in coming years.
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy rating among 19 Wall Street analysts. That rating is based on 16 Buy, two Hold, and one Sell recommendations issued in the last 12 months. The average LLY price target of $1,002.88 implies 25.46% upside from current levels.
