Eli Lilly GLP-1 pill Foundayo approved for obesity

US Food and Drug Administration approved Eli LillyThe company said the GLP-1 pill is a major milestone for the Indianapolis-based drugmaker and will test the market for new weight-loss drugs.

Lilly said its once-daily Foundayo pill will begin shipping from direct-to-consumer platform LillyDirect on Monday and will be available at pharmacies and telehealth platforms “shortly.” While people who are covered by insurance can pay $25 a month with a coupon they get from Lilly, those who pay out of pocket can pay between $149 and $349, depending on the dose.

The approval comes just a few months after Lilly submitted the drug to the FDA as part of a program that provides expedited reviews for drugs deemed to be of national priority interest. This means Lilly will introduce Foundayo just three months or so after Novo Nordisk’s Wegovy pill, setting the stage for the next battle between rival drugmakers on the next frontier for GLP-1 drugs.

“This is a big moment,” Eli Lilly CEO Dave Ricks said in an interview with CNBC. “Obviously we’ve been working in this drug category for some time, with the first GLP-1 drug 20 years ago, and we’ve been improving ever since. Here’s an option that’s not as effective… but it’s more accessible, easier to fit into your daily routine.”

Lilly licensed the orforgliprone molecule from Japanese drugmaker Chugai in 2018 and paid just $50 million upfront for global rights to the drug. It doesn’t cause as much weight loss as Lilly’s best-selling drug, Zepbound; That raises questions about how big the drug will be at a time when millions of people seem content to inject themselves once a week.

Analysts predict Foundayo sales will reach $14.79 billion by 2030, according to FactSet. That compares with expectations of $24.68 billion for weight-loss drug Zepbound and $44.87 billion for Mounjaro, which is marketed for diabetes in the U.S. and obesity and diabetes in the rest of the world.

Ricks said shooting isn’t as big of a hurdle as Lilly once thought. He sees Foundayo as an attractive option for people who still prefer to take pills or are looking for a lower price than injectable drugs.

He thinks it plays a role in maintenance for people who have reached their goal weight in one shot and want to maintain it. And he sees Foundayo as a way to “get to the planet” without the production constraints or cold chain requirements that come with Zepbound.

Foundayo is a small molecule, while Zepbound and Wegovy are peptides that require more intensive production processes; Ricks thinks it will block generic versions of Wegovy that have recently launched in some countries, such as India.

“[Foundayo] It allows for scalability, which will allow us to launch this globally initially,” Ricks said. “So today, you can get it orally. [Wegovy] It’s in the US, but you really can’t find it anywhere else. It will be marketed worldwide. “As soon as we get regulatory approvals, we will actually have the scale to provide the world with an oral GLP-1 inhibitor.”

Lilly expects Foundayo to be approved in more than 40 countries next year. The company has invested more than $55 billion in production since 2020; This includes opening new sites and expanding existing facilities to produce pills.

Lilly will compete with Novo’s newly launched Wegovy pill in the US. Early demand for the pill has been stronger than expected, with Novo reporting that it filled more than 600,000 prescriptions in March.

Novo CEO Mike Doustdar told CNBC in February that one of the first takeaways from the launch was that the pill appeared to expand the obesity treatment market, attracting new patients rather than converting existing patients with injections. Ricks agreed with that assessment and said Lilly wasn’t interested in people buying Foundayo or Zepbound.

“We want people to use medications that align with their health goals,” Ricks said. “If Lilly is in the box, that’s our goal.”

Novo plans to claim that the Wegovy pill is more effective than Foundayo. The Wegovy pill showed an average weight loss of around 16.6% in a late-stage trial, while Lilly’s oral drug caused an average of 12.4% in a separate study when analyzing patients who continued treatment. Lilly’s Zepbound has consistently shown that it can help people lose more than 20% of their body weight.

Meanwhile, Lilly plans to tout that Foundayo can be taken at any time without restrictions, while the Wegovy pill should be taken first thing in the morning on an empty stomach with just a few ounces of water.

It is the starting price when two drugs are the same. Thanks to a deal the companies struck with the Trump administration last fall, the lowest doses of both drugs will cost $149 for customers who pay cash. Obesity medicine physician Dr. Nidhi Kansal said price is the most important factor for patients.

“Unfortunately, price is what drives the decision-making process between clinicians and patients for these drugs because they are all excellent drugs and we have many options now, but at the end of the day it is still a financial decision,” Kansal said.

BMO Capital Markets analyst Evan David Seigerman said the lower price point and the availability of a pill versus a shot has opened up the market to casually interested patients. Medicare seniors will have access to Foundayo and other GLP-1 obesity drugs for $50 a month starting this summer as part of Lilly and Novo’s deals with the Trump administration. Ricks expects a “pretty solid” response to the program, which Lilly included in its financial guidance this year.

Analysts say the successful launch of Foundayo is key to Lilly’s shares rebounding from recent weakness. The company’s shares have fallen nearly 14% this year, following a meteoric rise that briefly made Lilly the first trillion-dollar healthcare company with a market value. Cantor Fitzgerald analyst Carter Gould said sales are a lagging indicator, so analysts will track prescriptions to monitor pill uptake.

“If the scenarios are going in the right direction and you see gains continuing, my guess is that people will notice any volatility around it. [the first or second quarter]” said Gould.

Another factor affecting Lilly’s performance this year is the upcoming release of retatrutide, a more effective drug against obesity. The company has already shared some late-stage data on this drug, but the most important trial is one that looks specifically at the treatment for weight loss. If Retatrutide meets its expectations, Lilly will be on track to build a portfolio of obesity drugs.

“There will be more options in the future, and that’s a great thing,” Ricks said. “And hopefully Lilly is the one offering those choices.”