Eli Lilly's Orforglipron Shows 7.9% Weight Loss, Boosts Stock 34%

Eli Lilly and Company has received an "overweight" rating from Morgan Stanley, with a target price of $1,124, which is 34% higher than the current stock price. This optimistic outlook is driven by the impressive results from the phase three clinical trials of Lilly's oral weight loss drug, Orforglipron. The trials showed that patients taking Orforglipron lost an average of 16 pounds, or 7.9% of their body weight, compared to a 1.6% weight loss in the placebo group. These results not only met but exceeded Lilly's weight loss targets, which ranged from 4-5% to 6-7%.

Morgan Stanley views this news as a positive catalyst for Lilly's stock. The safety profile of Orforglipron was found to be consistent with other GLP-1 class drugs already on the market. The most common side effects were gastrointestinal reactions such as diarrhea and nausea, with no signals of liver safety risks observed. This safety profile, combined with the drug's efficacy, positions Orforglipron as a strong competitor in the weight loss market. Morgan Stanley projects that Orforglipron could achieve sales of approximately $70 billion by 2033, highlighting its significant market potential.

The positive trial results and Morgan Stanley's endorsement have sparked investor interest in Lilly's stock. The company's shares surged, reflecting the market's confidence in Orforglipron's potential to drive future growth. The drug's ability to match or surpass the efficacy of injectable GLP-1 drugs, coupled with its oral administration, makes it an attractive option for patients seeking weight loss solutions. This, in turn, could translate into substantial revenue for Lilly, further justifying Morgan Stanley's bullish stance on the stock.