In the business world, many companies struggle to survive beyond a decade, but a select few manage to stand tall for over a century. Innovation is often the key to their longevity. As a pharmaceutical company with a 150-year history, Eli Lilly (LLY) has proven this rule through continuous breakthroughs, particularly its leadership in the fields of diabetes and weight loss drugs.
Today, Eli Lilly is once again reaching a significant milestone. The company’s newly launched oral GLP-1 weight loss drug, Foundayo, has received approval and entered the market. Whether this new product can become the biggest game-changer in Eli Lilly’s century-long history is drawing considerable market attention.
Obesity has been recognized as a global epidemic. Over the past few decades, obesity rates have continued to rise, closely linked to health issues such as diabetes, cardiovascular disease, and various cancers. The situation is particularly severe in the United States: a significant proportion of adults are overweight or obese, and 40% of adults are in a prediabetic state.
Eli Lilly’s previously launched tirzepatide (marketed as Zepbound for weight loss) is a leading therapy in this field. However, due to uneven third-party insurance coverage, high out-of-pocket costs for patients, the need for subcutaneous injection, and strict storage requirements, the adoption of Zepbound and similar drugs has been slower than market expectations.
The arrival of Foundayo is precisely aimed at addressing these pain points. Although its efficacy may not match that of Zepbound, it is more affordable, does not require injection, and has less stringent storage requirements. For patients who are reluctant to accept injectable treatments, Foundayo has the potential to improve treatment adherence.
Foundayo is not the first oral GLP-1 weight loss drug to be approved. Oral Wegovy launched earlier this year and quickly gained market acceptance, attracting many patients who had previously been hesitant about weight loss treatments.
This phenomenon offers an important insight for Foundayo: the new product will not simply compete with Zepbound but will instead complement it. Even with a lower unit price, Foundayo is still expected to generate substantial sales within the next five years. Analysts project that within the eight months following its approval this year, the drug could achieve sales of $1 billion to $2 billion. If this pace continues, its market performance by 2030 is highly promising.
Of course, Foundayo will also face challenges, including oral Wegovy and other oral formulations under development by biotech companies. However, Foundayo has demonstrated good performance in helping diabetic patients lower their A1C levels. Additionally, unlike oral Wegovy, Foundayo does not require food or water restrictions when taken. New entrants will need to produce superior glucose-lowering and weight-loss data to pose a substantial threat to Foundayo.
Together, Foundayo and Zepbound highlight the enormous opportunity for Eli Lilly in the weight loss drug market. Moreover, Eli Lilly’s innovation is not limited to the weight loss field. Among its pipeline products and already marketed drugs in areas such as oncology and immunology, the company already has several blockbuster drugs with annual sales exceeding $1 billion. At the same time, Eli Lilly is also an excellent choice for dividend investors, with its dividend having grown by a cumulative 239% over the past decade. Overall, Eli Lilly remains a high-quality stock worth buying and holding for the long term.
