Is Eli Lilly (LLY) the ultimate winner in the obesity drug race after Novo Nordisk's guidance cut?

**Eli Lilly is positioned as a strong contender and may ultimately emerge as the winner in the obesity drug race**, considering the following points: 1. **Market Leadership and Product Pipeline**: Eli Lilly has established a significant lead in the obesity drug market with its dual GLP-1/GIP agonist tirzepatide, branded as Mounjaro and Zepbound. The company has a wide economic moat and a high morningstar uncertainty rating due to the high variable outcome for several key drug launches. Lilly's pipeline, including the oral obesity drug orforglipron and the triple-action retatrutide, is poised to further solidify its leadership in obesity. 2. **Sales Performance and Market Share**: Zepbound has captured nearly 60% of the US obesity drug market, and Mounjaro has shown remarkable growth, with sales of $3.53 billion in the fourth quarter of 2024. Lilly is expected to enroll about 500,000 new obesity drug patients per month and maintains over 60% share in the category. 3. **Regulatory Advantages and Market Expansion**: The regulatory environment has been favorable for Eli Lilly, with accelerated approvals for therapies like Zepbound, which demonstrated superior weight loss outcomes compared to Wegovy. The obesity market is projected to grow at a 15% CAGR through 2030, offering significant expansion opportunities for Lilly's long-acting and oral therapies. 4. **Competitive Dynamics and Strategic Moves**: Despite Novo Nordisk's challenges, including the impact of knockoff versions of Wegovy, Eli Lilly is advancing in the obesity drug sector. Lilly's strategic moves, such as the acquisition of KeyBioscience to expand its obesity franchise, indicate a focused approach to capitalize on market opportunities. 5. **Financial Performance and Analyst Confidence**: Eli Lilly's financial performance has been robust, with a projected $113 billion in prescription drug sales by 2030, well ahead of Novo Nordisk's estimated $84 billion. Analysts maintain a bullish stance on Lilly's stock, with a high price target of $1,100. In conclusion, while Novo Nordisk faces significant challenges, Eli Lilly's market leadership, product pipeline, and strategic positioning suggest that Lilly is well-positioned to maintain and potentially increase its share of the obesity drug market.