By David Wainer

Weight-loss injections such as Wegovy and Zepbound have already reshaped medicine and raked in billions of dollars in sales -- but they have barely scratched the surface.

In the U.S. where adoption is highest, fewer than 1 in 10 adults are on a GLP-1 drug, despite nearly three-quarters being overweight or obese. Globally access is even more limited, held back by high costs, strict coverage requirements and supply shortages.

A pill could change all that. Cheaper to make, easier to distribute and simpler to take, an oral weight-loss drug could finally bring obesity treatment to the masses.

Wall Street, however, seems to have soured on the opportunity. On Thursday, Eli Lilly lost over $100 billion in market capitalization, with the stock falling 14% after the company reported underwhelming results for its much-anticipated pill, orforglipron. Patients on the highest dose of the drug lost an average of 12.4% of their body weight after more than a year.

Lilly's injectable drug Zepbound has helped patients lose more than 20% of their body weight in clinical trials, while Novo Nordisk's Wegovy has shown weight loss of about 15%. Lilly had earlier suggested that its pill could deliver weight loss somewhere on par with Wegovy. That set expectations high -- and explains the Street's disappointment when Thursday's results came in below that bar.

Yet Lilly's pill could still be a commercial breakthrough, not because it is more potent, but because it is more accessible. A once-daily oral drug that requires no refrigeration and is easier to manufacture could dramatically expand the market. It could be prescribed more readily by primary-care doctors, shipped like any other medication and used in global regions where injectables remain impractical. It might also attract patients who avoid needles or those with milder obesity looking for a simpler, longer-term maintenance option.

Louis Aronne, an obesity expert at NewYork-Presbyterian/Weill Cornell Medical Center, argues that a competitively priced obesity pill could transform treatment by enabling earlier, broader use -- similar to how physicians now manage blood pressure. "We don't wait until people have severe hypertension," says Aronne, a paid adviser to Lilly who has participated in its obesity studies.

Pricing will be critical. Lilly hasn't disclosed what orforglipron will cost, but investors widely expect it to be cheaper than the company's injectable drug, Zepbound. Citi analyst Geoff Meacham has floated a tiered, direct-to-consumer pricing model based on income. That might sound too egalitarian for Wall Street, but with pressure coming from the White House to lower prices and cut out the middleman, it is no longer unthinkable.

On a call with analysts Thursday, Lilly Chief Executive Dave Ricks hinted at more accessible pricing, describing the pill as a medicine that could treat a larger population suffering from "less complicated obesity."

"You can continue to expect Lilly to offer consumer-level pricing as long as we have such a large hole in coverage in our country," he added.

A pill for weight loss could also open up the market beyond just the U.S. Last year, about 85% of Lilly's sales of Zepbound and Mounjaro came from the U.S.; for Novo, more than 70% of Wegovy and Ozempic revenue was U.S.-based.

The biggest constraint is manufacturing. Injectable GLP-1 drugs require specialized facilities and complex delivery pens, making them harder to produce at scale. Lilly and Novo Nordisk have struggled to keep up with U.S. demand, creating an opening for unofficial, compounded versions. Novo even cut its sales-growth forecast this year, citing in part the roughly one million people now using these knockoffs.

Lilly's stumble could open the door a tad for its Danish rival. Novo Nordisk has already filed for FDA approval of what is essentially Wegovy in a pill. The Street has been skeptical of the drug because it is a large molecule that is more expensive and complex to manufacture. It also must be taken on an empty stomach -- a hurdle for real-world adherence.

Lilly's underwhelming results sent Novo stock up 7.5% in U.S. trading on Thursday. It also ensures that Wall Street will keep scanning the biotech horizon for a better pill. "Eli Lilly's rare miss from its otherwise impenetrable obesity franchise could create an opening for smaller competitors," wrote William Blair analyst Andy Hsieh. Viking Therapeutics, which is developing a rival oral therapy, surged nearly 12%.

After the drop, Lilly now trades at 24 times forward earnings -- down sharply from nearly 40 times just months ago. That suggests the more optimistic estimates that orforglipron could eventually peak at $25 billion to $40 billion in sales have already been stripped out of the stock. For investors, the market's first true small-molecule obesity pill is now being offered at a more reasonable valuation.

The road to bringing an oral therapy to the masses is far from simple and will continue to raise questions. But one thing is clear: Weight-loss pills are coming -- and they will open a new chapter in obesity treatment, expanding access and accelerating global reach.

Write to David Wainer at david.wainer@wsj.com

(END) Dow Jones Newswires

August 08, 2025 05:30 ET (09:30 GMT)

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