According to the latest report from BMO Capital Markets, US pharmaceutical giant Eli Lilly's GLP-1 drug Zepbound is expected to "dominate" the weight loss market in 2024, which will increase the company's stock price by another 20% from current levels. Zepbound was approved by the FDA in November for long-term weight management in obese or overweight adults with at least one weight-related condition, such as high cholesterol, high blood pressure or type 2 diabetes. The drug was officially launched in December last year.
Zepbound’s active ingredient is Tirzepatide, the same active ingredient in another Eli Lilly drug, Mounjaro. Mounjaro was approved by the FDA in 2022 for patients with type 2 diabetes.
According to data from drug data company IQVIA cited by BMO, the number of prescriptions for Mounjaro jumped to a record 291,225 in the week ended December 15, a 2% month-on-month increase. Meanwhile, Zepbound's single-week prescription volume soared 192% month-on-month to 22,335 as Eli Lilly ramped up production of the drug in its first full month on the market.
"The prescription volume of Zepbound has grown rapidly, and the prescription volume of Mounjaro has reached a record high, which is equivalent to saying that the era of tilpotide has begun." Evan Seigerman, a biopharmaceutical analyst at BMO, said.
In the week when Eli Lilly's GLP-1 drug prescriptions surged, its competitor Novo Nordisk's GLP-1 drug prescriptions declined. The weekly prescriptions of Wegovy and Ozempic fell by 4.4% and 1.6% respectively. Data suggests Eli Lilly's GLP-1 drug could take market share from Novo Nordisk.
Impressively, Zepbound reached 22,000 prescriptions per week in its fourth week on the market, while Mounjaro only had 8,101 prescriptions in its fourth week. However, Wegovy and Ozempic only received more than 22,000 prescriptions per week three or four months after their launch.
Seigerman noted that this is preliminary validation that Eli Lilly's GLP-1 drug will be dominant in 2024. “We are confident in Tilpotide’s superior efficacy, tolerability and supply chain,” he said.
2021 clinical trial data published in the New England Journal of Medicine showed that compared with simaglutide, the active ingredient in Wegovy and Ozempic, tilpotide allowed patients to lose more weight and have less severe side effects such as nausea and diarrhea.
On an annual basis, Lilly's GLP-1 drug prescriptions will reach at least 16 million in 2024, a number that could grow significantly as Lilly works to increase supply of Zepbound.
The stock price is expected to rise another 20%
BMO rates Lilly an "outperform" rating and has a price target of $710, representing about 20% upside potential from current levels. The bank included Eli Lilly stock in its "top 15 preferred stocks."
On Tuesday, Eli Lilly's share price rose 1.59% to US$592.2, with a current market value of approximately US$562.2 billion. The stock price has increased by more than 60% in the past year.
In May last year, Eli Lilly surpassed Johnson & Johnson to become the world's most valuable pharmaceutical company.
Billionaire investor and Home Depot co-founder Ken Langone recently said that Eli Lilly is expected to become the first pharmaceutical company in history to be worth more than a trillion dollars.