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Eli Lilly rises after European panel backs weight-loss pill
Eli Lilly shares rose 0.4% on Friday after a European Medicines Agency committee recommended approval of Foundayo, the company's GLP-1 pill for diabetes and weight management.
Quick Read
- A European Medicines Agency committee recommended approval of Eli Lilly's Foundayo, an oral GLP-1 pill for diabetes and weight management.
- Eli Lilly shares rose 0.4% on Friday while the S&P 500 slid 1.1%.
- The most commonly reported side effects are nausea, vomiting and diarrhea.
- Eli Lilly is scheduled to report quarterly results on Oct. 29.
What happened to Eli Lilly shares?
Eli Lilly (NYSE: LLY) shares rose 0.4% on Friday, Oct. 16, closing at $1,257.03. They had ended the previous session at $1,251.61. About $3 billion worth of shares changed hands.
Why it matters: The gain came on a weak day for the broader market. The S&P 500 slid 1.1%, and a fund tracking health care stocks fell 0.3%.
By the numbers: The stock finished about 1.8% below its 52-week high of $1,280.34. A 52-week high is the highest price of the past year.
What did the European committee decide?
The Committee for Medicinal Products for Human Use, part of the European Medicines Agency, issued a positive opinion on Friday. It recommended that Foundayo be authorized for sale. The opinion is a recommendation rather than a final approval.
Foundayo is a tablet taken by mouth. Its active ingredient is orforglipron, a GLP-1 drug. These medicines act like a gut hormone that helps control blood sugar and appetite.
The recommended uses cover adults only. For weight management, the pill is meant for adults with obesity. It also covers overweight adults with at least one weight-related condition, such as prediabetes, high blood pressure, or sleep apnea.
For the most common form of diabetes, it is meant for adults whose condition is not well controlled. It could be used alone when metformin is unsuitable, or with other diabetes medicines. In both cases it would go alongside diet and exercise.
Why does a pill matter, and what are the risks?
The other side: A pill may appeal to patients who would rather avoid injections.
The most commonly reported side effects for the pill are stomach problems, including nausea, vomiting, and diarrhea.
The share move was modest. A recommendation in one region is a single step, and the stock was already trading near its high for the year before the news.
What comes next for Eli Lilly?
What’s next: Eli Lilly is scheduled to report quarterly results on Oct. 29. Those results may offer the company's next update on its business, including its plans for Foundayo.
For readers
What it could mean for you: People who own Eli Lilly shares directly carry the full effect of news like this, with no other holdings to offset it. A European recommendation for Foundayo points to a possible new market for the pill, though the opinion is not itself a final approval. The company's quarterly results on Oct. 29 may give shareholders more detail on its plans. Owners of broad index funds feel the news only in proportion to Lilly's weight in the fund. Patients in Europe could eventually gain a pill option alongside injections.
Questions and answers
What is the Foundayo pill?
Foundayo is an Eli Lilly tablet whose active ingredient is orforglipron, a GLP-1 drug. It is meant to help adults control blood sugar and manage weight alongside diet and exercise.
Is Foundayo approved in Europe?
A committee of the European Medicines Agency issued a positive opinion on Friday, recommending that Foundayo be authorized for sale. That opinion is a recommendation rather than a final approval.
Who could use Foundayo?
The recommendation covers adults with obesity and overweight adults with at least one weight-related condition. It also covers adults with the most common form of diabetes whose condition is not well controlled.
How did Eli Lilly stock react to the news?
Eli Lilly shares rose 0.4% on Friday to close at $1,257.03. The broader S&P 500 slid 1.1% the same day.
The numbers
| Eli Lilly (LLY) price | $1,257.03 |
|---|---|
| Eli Lilly (LLY) change | +0.43% |
| Eli Lilly (LLY) 52-week high | $1,280.34 |
| S&P 500 change | −1.09% |
| 10-year Treasury yield | 5.09% |
Friday’s close
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