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Business Insider
07-07-2025
- Business
- Business Insider
Eli Lilly's 3-step strategy to dominate the $95 billion obesity market
In sports, the best athletes compete against themselves. In the world of weight loss drugs, Eli Lilly is quickly becoming that all-star player that bests the competition every time. "Lilly is the king. They're the king of the mountain," Deutsche Bank's James Shin, director of biopharma equity research, told Business Insider. Investors are increasingly buzzing about the world's most valuable healthcare company, the one that they say has left its rivals in the dust. Danish drugmaker Novo Nordisk, the company that developed Ozempic, initially seemed unbeatable in the new market for injectable diabetes and weight loss medications. But ever since 2022, when Eli Lilly's tirzepatide was first approved for use in the US, Lilly's been steadily gaining ground. Now, the company is developing a menu of other obesity drugs that could cater to anyone. There's a pill for weight loss instead of an injection. There are drugs that tap into new appetite-regulating hormones; an antibody injection to protect muscles while burning up excess fat. "Investors are starting to talk about Lilly on their own cue, rather than in the context of Novo," Asad Haider, Goldman Sachs's lead analyst for US pharmaceuticals, told BI. "They are at the forefront of almost every existing as well as emerging mechanism across anti-obesity, and it's going to be really hard, in our view, to leapfrog them." So, we caught up with Eli Lilly Executive Vice President Ken Custer, the man overseeing it all. Custer is the new president of Lilly's cardiometabolic health division, and in a recent one-on-one with BI, he shared the strategy behind the company's success so far and how they plan to maintain their big lead in the long run. Eli Lilly is set to dominate the market by 2030 Eli Lilly's tirzepatide, the drug currently leading the charge, is the strongest weight loss drug available so far. While Novo's Wegovy supercharges one of our hunger hormones (GLP-1), Lilly's Mounjaro has two (GLP-1 and GIP), making it a more powerful weekly shot to control appetite and blood sugar. One recent head-to-head study showed patients who spent a year on tirzepatide lost, on average, about 15% of their body weight, while those on semaglutide (the drug in Ozempic) lost just 8%. By 2030, Goldman is forecasting, conservatively, that Lilly will capture nearly 50% of the $95 billion anti-obesity medicine market. That forecast includes the injectable drugs we have now, like Mounjaro and Ozempic (for diabetes) plus Wegovy and Zepbound (for obesity) but may also extend to new drugs in the pipeline, both at Eli Lilly and coming from other drugmakers with smaller portfolios. But right now, Lilly seems to be ahead of the competition in just about every category. In June, at the American Diabetes Association's big annual research conference (ADA), Lilly's updates from ongoing trials were "incrementally better" than investors had expected, Haider said. "Then on the other side of that, a lot of their late-stage competition — specifically Novo Nordisk, but also Amgen — the updates that you got from them at ADA had a little bit more hair on them, and were frankly met with more disappointment." 1. Speed: 'This ratchet mindset' drives Lilly to develop drugs faster and faster Eli Lilly CEO Dave Ricks shared some of the secrets behind the big speed up that's shifted the company from an 11-year average time to market (when he first became CEO in 2017) to a six-year average now. "We really track things very carefully on speed," Ricks said in an interview last October on the "All-In" podcast. "The big idea is like this ratchet mindset that every time we beat a timeline, that becomes the new norm. We just re-benchmark internally." Case in point: It took about two decades to get Trulicity, Eli Lilly's first GLP-1 drug, on the market. Tirzepatide? About eight years — "blistering speed," Custer said. 2. Convenience: a cheap(er) pill to rival Ozempic Eli Lilly is in the late stages of developing the first Ozempic-like pill, designed to be just as strong as Novo's injectable drug. The drug, orforglipron, could be available as early as 2026. There are only about 8 million people currently on Mounjaro, Ozempic, Wegovy, and Zepbound in the US, which speaks to both the high cost of the injectable drugs and the supply bottlenecks. "The injectable GLP-1s are wonderful medicines, but manufacturing those medicines is hard," Custer said. "The factories that you have to use to do the sterile filling of the vials, the syringes, the devices, the cartridges are extraordinarily hard to build and operate." Custer believes a daily pill could completely change the game — opening up this new class of hormone-mimicking weight loss and diabetes drugs called incretins to hundreds of millions more people across the globe. "I think we're at a defining moment in our company's history," Custer said. He added that he sees this as "a generational opportunity that is probably close to what was seen with the early days of vaccines and antibiotics." Eli Lilly is already manufacturing hundreds of thousands of orforglipron pills, just to make sure it will be able to meet the demand if the drug is approved for use in the US next year. That's a somewhat risky move, considering that the company's final Phase 3 clinical trials that the US Food and Drug administration requires to evaluate the drug aren't even done yet. If approved, orforglipron should also (thankfully) have a more pronounceable brand name. Expect the cost of the pill to rival a "fancy gym membership," Shin said, meaning maybe around $300 for one month — a quarter of the cost of some injectable weight-loss drugs. Other companies' attempts to develop a new weight loss pill have been lackluster. Pfizer ditched its obesity pill candidate earlier this year, while Novo Nordisk's pill version of semaglutide, called Rybelsus, is not nearly as effective as Ozempic: Most patients on the pill lose less than 5% of their body weight, while people using the weekly shot can often achieve 10-15% weight loss, or more. 3. Creating a laundry list of new options to get ahead The north star of Eli Lilly's strategy now is variety — developing a broader range of options for consumers than any of their competitors. "If you have a billion people around the world or more living with overweight or obesity, they're not all going to be helped by one medicine," Custer said. "We see this segmenting it into several logical categories." The shift is already underway to find new weight loss options that will harness different hunger hormones (like amylin), use new routes of administration (pills or IVs instead of just injection pens), and have different dosing schedules (daily, weekly, or monthly). "They're trying to address every type of patient," Shin said. Here's the menu, beyond orforglipron: Bimagrumab: Looking to protect muscle while you lose fat? This is an Eli Lilly drug which may become available after orforglipron, if the mid-stage trials go well in the next couple of years. In the most recent trial results, the company shared on bimagrumab at ADA, patients on the drug achieved 100% fat loss, essentially preserving all their muscles. This idea of making sure patients lose the right kind of weight — not compromising their strength just to slim down — is the holy grail in incretin drug development right now, generating tons of buzz and investment. Retatrutide: If it's more powerful drugs you're after, then there's the "king kong" triple agonist that the company has been working on. It won't likely be ready to approve until late 2026, at the very earliest, but in clinical trials, it has shown weight loss on par with bariatric surgery, and some patients have lost more than a third of their total body weight, requiring entirely new wardrobes. Eloralintide: Finally, there's Lilly's investigational drug that mimics amylin, another metabolism-regulating hormone. It's still early days for eloralintide and for amylin medications in general. So it's possible that competitors like Novo Nordisk or Amgen could develop a compelling amylin drug before Eli Lilly does. "What's exciting is we feel like we're leading in most, if not all of those categories, but we'll come up with new categories," Custer said. "It is really about tailoring. I think bimagrumab and eloralintide and retatrutide and orforglipron are really the first part of that story, but of course, we have other ideas we're working on as well." Investors want in on that action. Both Goldman Sachs and Deutsche Bank sent BI disclosure statements for this story, because they each have a financial relationship with Eli Lilly (I challenge you, dear reader, to find a major investment bank that does not). In the long run, Eli Lilly is thinking ahead to a day when this class of medications could even treat conditions beyond metabolism and heart health, including dementia, inflammation, substance abuse, and pain. (Scientists are starting to study whether incretin drugs might treat migraines, for example). "It may be even in the future, when you're checking out at Kroger, in addition to the 'get your annual flu vaccine,' you see a sign that says 'get your annual metabolic shot,'" Custer said.
Yahoo
05-07-2025
- Business
- Yahoo
Goldman Sachs Rates Johnson & Johnson a Buy, Citing Pipeline Strength and Policy Tailwinds
Johnson & Johnson (NYSE:JNJ) ranks among the best set-it-and-forget-it stocks to buy. Asad Haider, a Goldman Sachs analyst, remained optimistic about Johnson & Johnson (NYSE:JNJ) shares, rating it as a Buy on June 5. The analyst noted several factors that lead to the update. Pixabay/Public Domain Similar to its industry peers, the company demonstrates a proactive approach to navigating regulatory environments by participating in policy discussions with the administration. This could result in positive outcomes in areas such as 340B reform and PBM. Johnson & Johnson's innovation skills are further demonstrated by the company's pharmaceutical pipeline achievements, including the encouraging Carvykti data and the expected approval of TAR-200. The company's strategic move from Stelara to Tremfya and its investments in commercial fulfillment further highlight its commitment to preserving a dominant market position. Johnson & Johnson (NYSE:JNJ) is a notable name in the healthcare industry, which includes sub-sectors like pharmaceuticals, medical equipment, and consumer health products. The company is known for creating medications to treat a variety of conditions and diseases, including cancer, diabetes, and HIV/AIDS. While we acknowledge the potential of JNJ as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. Read More: and Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
04-07-2025
- Business
- Yahoo
Goldman Sachs Rates Johnson & Johnson a Buy, Citing Pipeline Strength and Policy Tailwinds
Johnson & Johnson (NYSE:JNJ) ranks among the best set-it-and-forget-it stocks to buy. Asad Haider, a Goldman Sachs analyst, remained optimistic about Johnson & Johnson (NYSE:JNJ) shares, rating it as a Buy on June 5. The analyst noted several factors that lead to the update. Pixabay/Public Domain Similar to its industry peers, the company demonstrates a proactive approach to navigating regulatory environments by participating in policy discussions with the administration. This could result in positive outcomes in areas such as 340B reform and PBM. Johnson & Johnson's innovation skills are further demonstrated by the company's pharmaceutical pipeline achievements, including the encouraging Carvykti data and the expected approval of TAR-200. The company's strategic move from Stelara to Tremfya and its investments in commercial fulfillment further highlight its commitment to preserving a dominant market position. Johnson & Johnson (NYSE:JNJ) is a notable name in the healthcare industry, which includes sub-sectors like pharmaceuticals, medical equipment, and consumer health products. The company is known for creating medications to treat a variety of conditions and diseases, including cancer, diabetes, and HIV/AIDS. While we acknowledge the potential of JNJ as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. Read More: and Disclosure: None.
Yahoo
11-06-2025
- Health
- Yahoo
Domino's Pizza, McDonald's rating surprise tied to persistent consumer issue
Domino's Pizza, McDonald's rating surprise tied to persistent consumer issue originally appeared on TheStreet. Even the Hamburglar didn't see this one coming. Excessive weight has been a persistent problem in America, where at least one in five adults in each U.S. state is living with obesity, according to the Centers for Disease Control and Prevention. 💵💰💰💵 As obesity rates have risen, so have scientists' efforts to address this serious health issue, which can cause asthma, heart disease, stroke, type 2 diabetes and even some cancers. Early attempts to treat obesity came to the market as early as the 1930s. Amphetamines were the prevalent treatment in the 1940s and 1950s and demand continued into the 1990s. Glucagon-like peptide-1 agonists, which mimic the action of the naturally occurring hormone GLP-1, have been available for about two decades. GLP-1 medications, including Ozempic, Wegovy, Zepbound and Mounjaro, have been used for years to treat Type 2 diabetes, and studies have found that they are also effective at encouraging weight loss. Wegovy and Ozempic are manufactured by Novo Nordisk () , while Eli Lilly () makes Zepbound and Mounjaro. One investment firm says increased use of these medications could have serious implications for two of the biggest names in the fast-food industry: McDonald's () and Domino's Pizza () . The market for anti-obesity drugs, particularly those using injectable versions of GLP 1-based drugs, is still new and continuously evolving, Goldman Sachs said in a May 22 report. More Restaurants Beloved Mexican restaurant closing iconic location after 63 years Major restaurant chain quietly closes several locations Iconic restaurant closing its doors after 32 years The investment firm lowered its projections for such medication and now forecasts the global market to reach $95 billion by 2030. That's down from the previous estimate of $130 billion to reflect trends influencing how the drugs are priced, how long patients stay on them, and how patient populations are segmented. Goldman lowered its U.S. market projections to a peak of $70 billion, but the firm sees room for greater penetration in markets outside the U.S. Goldman forecasts a market peak of $50 billion outside the US, compared with $35 billion previously. A survey of more than 50 doctors in the US found that lower doses of anti-obesity medications are working well for a majority of patients and insurance coverage is the most important factor in the decision-making process, Goldman Sachs wrote. 'But to be clear, even with this moderated forecast, we see a significant growth opportunity for both existing players as well as new entrants into this market,' said Asad Haider, head of the health-care business unit within Goldman Sachs Research. Demand for GPL-1 drugs could dramatically hinder the food and restaurant industries, according to a study from Cornell's SC Johnson College of Business and the data firm Numerator. The report, entitled "The No Hunger Games," found that households with at least one user of GLP-1 drugs reduced its grocery spending by about 6% within six months of starting the drugs. The spending cut was as much as 9% for higher-income households. "We also find an 8.6% decline in spending at fast-food chains, coffee shops and limited-service restaurants," the study said. "Our findings highlight the potential for GLP-1 medications to significantly change food demand, a trend with increasingly important implications for the food industry as GLP-1 adoption continues to grow." The study warned that common side effects of GLP-1 medications, such as nausea, vomiting and gastrointestinal discomfort, have reportedly led to reduced adherence or discontinued use for some patients."Moreover, their long-term efficacy and safety remain areas of ongoing investigation," the report said. Redburn Atlantic analyst Chris Luyckx focused on the growing adoption of GLP-1 in recent research reports. Luyckx double-downgraded McDonald's to sell from buy with a price target of $260, down from $319. The analyst expects the GLP-1 weight-loss drugs to suppress consumer appetites and says they present an underappreciated longer-term threat for McDonald's. A 1% drag on sales today "could easily build to 10% or more over time," particularly for restaurant brands skewed toward lower-income consumers, the analyst tells investors in a research note. McDonald's stock was down about 1.3% at last check and is up 18.5% from a year ago. Redburn Atlantic also initiated coverage of Domino's Pizza with a sell rating and $340 price target. Domino's, the world's largest pizza chain, faces the heaviest pressure from adoption of GLP-1 weight loss drugs, with high exposure to dinner occasions and lower-income consumers, the firm said. Redburn Atlantic said the company's organic traffic remains weak, with carry-out far outpacing delivery. Challenged system-sales growth and elevated consensus expectations present downside risk for Domino's, the firm said. McDonald's closed regular trading on June 10 down 1.4% at $300.43. Domino's shares were off 2.7% at $ Pizza, McDonald's rating surprise tied to persistent consumer issue first appeared on TheStreet on Jun 10, 2025 This story was originally reported by TheStreet on Jun 10, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
11-06-2025
- Health
- Miami Herald
Domino's Pizza, McDonald's rating surprise tied to persistent consumer issue
Even the Hamburglar didn't see this one coming. Excessive weight has been a persistent problem in America, where at least one in five adults in each U.S. state is living with obesity, according to the Centers for Disease Control and Prevention. Don't miss the move: Subscribe to TheStreet's free daily newsletter As obesity rates have risen, so have scientists' efforts to address this serious health issue, which can cause asthma, heart disease, stroke, type 2 diabetes and even some cancers. Early attempts to treat obesity came to the market as early as the 1930s. Amphetamines were the prevalent treatment in the 1940s and 1950s and demand continued into the 1990s. Glucagon-like peptide-1 agonists, which mimic the action of the naturally occurring hormone GLP-1, have been available for about two decades. GLP-1 medications, including Ozempic, Wegovy, Zepbound and Mounjaro, have been used for years to treat Type 2 diabetes, and studies have found that they are also effective at encouraging weight loss. Wegovy and Ozempic are manufactured by Novo Nordisk (NVO) , while Eli Lilly (LLY) makes Zepbound and Mounjaro. Image source:One investment firm says increased use of these medications could have serious implications for two of the biggest names in the fast-food industry: McDonald's (MCD) and Domino's Pizza (DPZ) . The market for anti-obesity drugs, particularly those using injectable versions of GLP 1-based drugs, is still new and continuously evolving, Goldman Sachs said in a May 22 report. More Restaurants Beloved Mexican restaurant closing iconic location after 63 yearsMajor restaurant chain quietly closes several locationsIconic restaurant closing its doors after 32 years The investment firm lowered its projections for such medication and now forecasts the global market to reach $95 billion by 2030. That's down from the previous estimate of $130 billion to reflect trends influencing how the drugs are priced, how long patients stay on them, and how patient populations are segmented. Goldman lowered its U.S. market projections to a peak of $70 billion, but the firm sees room for greater penetration in markets outside the U.S. Goldman forecasts a market peak of $50 billion outside the US, compared with $35 billion previously. A survey of more than 50 doctors in the US found that lower doses of anti-obesity medications are working well for a majority of patients and insurance coverage is the most important factor in the decision-making process, Goldman Sachs wrote. "But to be clear, even with this moderated forecast, we see a significant growth opportunity for both existing players as well as new entrants into this market," said Asad Haider, head of the health-care business unit within Goldman Sachs Research. Demand for GPL-1 drugs could dramatically hinder the food and restaurant industries, according to a study from Cornell's SC Johnson College of Business and the data firm Numerator. The report, entitled "The No Hunger Games," found that households with at least one user of GLP-1 drugs reduced its grocery spending by about 6% within six months of starting the drugs. The spending cut was as much as 9% for higher-income households. "We also find an 8.6% decline in spending at fast-food chains, coffee shops and limited-service restaurants," the study said. "Our findings highlight the potential for GLP-1 medications to significantly change food demand, a trend with increasingly important implications for the food industry as GLP-1 adoption continues to grow." The study warned that common side effects of GLP-1 medications, such as nausea, vomiting and gastrointestinal discomfort, have reportedly led to reduced adherence or discontinued use for some patients. Related: McDonald's analyst grills new stock price target on McCrispy reaction "Moreover, their long-term efficacy and safety remain areas of ongoing investigation," the report said. Redburn Atlantic analyst Chris Luyckx focused on the growing adoption of GLP-1 in recent research reports. Luyckx double-downgraded McDonald's to sell from buy with a price target of $260, down from $319. The analyst expects the GLP-1 weight-loss drugs to suppress consumer appetites and says they present an underappreciated longer-term threat for McDonald's. A 1% drag on sales today "could easily build to 10% or more over time," particularly for restaurant brands skewed toward lower-income consumers, the analyst tells investors in a research note. McDonald's stock was down about 1.3% at last check and is up 18.5% from a year ago. Redburn Atlantic also initiated coverage of Domino's Pizza with a sell rating and $340 price target. Domino's, the world's largest pizza chain, faces the heaviest pressure from adoption of GLP-1 weight loss drugs, with high exposure to dinner occasions and lower-income consumers, the firm said. Redburn Atlantic said the company's organic traffic remains weak, with carry-out far outpacing delivery. Challenged system-sales growth and elevated consensus expectations present downside risk for Domino's, the firm said. McDonald's closed regular trading on June 10 down 1.4% at $300.43. Domino's shares were off 2.7% at $455.49. Related: Fund-management veteran skips emotion in investment strategy The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
