Lilly’s Weight Loss Drugs: How They WorkLet’s delve into the story behind Lilly’s weight loss drugs. These medications belong to the dual GIP/GLP-1 receptor agonists class, targeting hormonal pathways related to digestion. They function by regulating blood sugar levels and appetite, delivering impressive results in both clinical trials and real-world settings.In a recent comparison study pitting it against Novo Nordisk’s Wegovy, Zepbound emerged victorious, showcasing an average weight loss of approximately 20% versus over 13% for the rival drug. Lilly and Novo Nordisk currently dominate this market.Further research on Zepbound suggests its potential in addressing various health issues in individuals with obesity, from heart failure to sleep apnea. Lilly has sought regulatory approval for the drug in these contexts when accompanied by obesity, recently securing clearance for use in sleep apnea. This regulatory approval could significantly expand Zepbound’s patient base.A critical challenge for Lilly has been meeting the escalating demand, creating opportunities for compounders to gain market share. These pharmacies are permitted to offer their versions of a pharmaceutical company’s drug, often at lower prices, when the drug is on the FDA shortage list. However, once the drug is removed from this list, compounders must cease sales.Recently, the FDA removed tirzepatide from the shortage list, citing adequate supply to meet current and projected demands. This development forces compounders to halt their versions of the drug within 60 to 90 days, depending on their operations. This decision is beneficial for Lilly as it compels patients to turn to the company for Zepbound or Mounjaro, maximizing the potential demand and revenue generation.Despite the previous drug shortage, these products raked in billions in revenue. With enhanced production capacity and compounders exiting the market, Lilly is poised for significant growth ahead. Considering Lilly’s broad portfolio encompassing various therapeutic areas and the robust performance of other key products like Verzenio, Taltz, and Humalog, the company remains a compelling investment option. Trading at 57x forward earnings estimates, Lilly is a promising pharma stock for 2025, offering long-term growth potential.Don’t miss out on seizing this promising investment opportunity. If you’ve ever felt like you overlooked investing in high-performing stocks, our expert analysts may have an upcoming “Double Down” stock recommendation that could be your chance to capitalize on potential market gains.
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Adria Cimino does not hold any positions in the aforementioned stocks. The Motley Fool endorses Novo Nordisk and upholds a transparent disclosure policy.
