Concerns in the market over a highly anticipated new product from Eli Lilly and Company (LLY) dampened investor enthusiasm for the stock on Friday. The pharmaceutical giant underperformed in trading that day, with selling pressure driving its share price down nearly 4% throughout the session.
The product raising concerns is Eli Lilly’s Foundayo, the company’s first oral tablet approved by the U.S. Food and Drug Administration (FDA) for weight loss. The market had high hopes for this drug, especially given the success of Eli Lilly’s injectable obesity treatment Zepbound, which has been a top-selling product for the company.
However, Foundayo may struggle to replicate that success. Media reports indicate that the drug’s initial sales performance has been relatively weak. Data reports show that during the week ending Friday, April 17, only 3,707 prescriptions were written for Foundayo.
Although this figure represents a significant increase from the previous week’s 1,390 prescriptions (the first week following FDA approval), it pales in comparison to its main competitor. Novo Nordisk’s (NVO) Wegovy oral tablet, the first oral obesity treatment to enter the market, received FDA approval in December of last year. In its second week on the market, Wegovy recorded 18,410 prescriptions.
Eli Lilly has previously stated that the weekly data for Foundayo may not be comprehensive. The company added that the drug’s performance is “best interpreted over time rather than as a complete count statistic.”
While this argument has some merit, it is worth noting that Zepbound (also the second-to-market product, following the historic FDA approval of injectable Wegovy in June 2021) became a blockbuster right from its initial launch. Therefore, the relatively low sales volume of Foundayo is indeed concerning, and the drug’s sales trajectory in the coming weeks warrants close attention to see if any improvement emerges.
In summary, the initial prescription data for Foundayo significantly underperformed compared to the same period for its competitor Wegovy, raising market questions about whether this new oral weight-loss drug from Eli Lilly can replicate the success story of Zepbound, and leading to a notable decline in the company’s stock price on Friday. However, as a pharmaceutical giant with a diverse portfolio of many products, Eli Lilly does not rely entirely on the weight-loss drug category. Therefore, investors should not be overly discouraged by Foundayo’s early data. The sales trend of this drug over the coming weeks will be a key window for assessing its market potential.
