Lilly's Diabetes Pill Clears Major Trial, Analyst Points To Global Potential

Eli Lilly And Co LLY on Thursday reported topline Phase 3 results from ACHIEVE-1 trial of orforglipron compared to placebo in adults with type 2 diabetes and inadequate glycemic control with diet and exercise alone.

In the first Phase 3 trial of the ACHIEVE program, orforglipron met the primary endpoint of superior A1C (blood sugar) reduction compared to placebo at 40 weeks, lowering A1C by an average of 1.3% to 1.6% from a baseline of 8.0%, using the efficacy estimand.

BofA Securities analyst Tim Anderson writes, “Arguably one of the biggest, most important, most closely-watched pipeline events in large cap biopharma has just played out. And it was favorable.”

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Anderson says the only other current oral GLP-1 drug is Novo Nordisk A/S’ NVO Rybelsus (semaglutide), a peptide with some limitations.

“The “key” with orforglipron is that it is a “small molecule” drug, meaning easy to scale and produce – recall past manufacturing problems with injectable GLP-1s (from Eli Lilly and Novo Nordisk),” Anderson adds.

An oral drug like this can help expand obesity treatment outside the U.S., especially in developing countries where keeping medications cold is difficult.

BofA writes Eli Lilly is mainly focusing on selling the oral version in markets outside the U.S., where prices need to be lower. Since oral drugs are easier and cheaper to produce, this makes sense.

“Positive results like these, in a skittish market, should be received well,” BofA writes.

BofA forecasts 2030 orforglipron sales of around $10 billion compared to a consensus of around $9 billion.

The analyst maintains the Buy rating, with a price forecast of $1,000.

Anderson writes, “On a macro perspective, we believe that given the strength of the Phase II data, positive Phase III ACHIEVE-1 efficacy results were expected. However, in light of Pfizer Inc's PFE recent discontinuation of danuglipron, tolerability and hepatotoxicity have emerged as more important clinical attributes, in our view.”

Price Action: LLY stock is up 16.3% at $854.84 at the last check Thursday.

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