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 drive the company's stock price up by an additional 20% from current levels.
Zepbound was approved by FDA in November last year for long-term weight management of obese or overweight adults with at least one weight related disease (such as high cholesterol, hypertension or type 2 diabetes). The drug was officially launched in December last year.
The active ingredient of Zepbound is Tirzepatide, which is the same as the active ingredient in another Eli Lilly drug, Mounjaro. Mounjaro was approved by FDA for use in patients with type 2 diabetes in 2022.
According to drug data company IQVIA cited by BMO, Mounjaro's prescription volume jumped to a record high of 291225 in the week ending December 15th, a 2% increase compared to the previous week. At the same time, as Lilly increased the production of the drug in the first full month after its official launch on Zepbound, the weekly prescription volume of Zepbound surged by 192% month on month, reaching 22335 copies.
"Zepbund's prescription volume has skyrocketed, and Mounjaro's prescription volume has reached a historic high, which is equivalent to saying that the era of telposide has begun," said Evan Seigerman, a biopharmaceutical analyst at BMO.
In the week when Lilly's GLP-1 prescription volume skyrocketed, its competitor Novo Nordisk's GLP-1 prescription volume declined, while Wegovy and Ozempic's weekly prescription volume decreased by 4.4% and 1.6%, respectively. Data shows that Lilly's GLP-1 drug may take market share from Novo Nordisk.
Impressively, Zepbound achieved a weekly prescription volume of 22000 in its fourth week of launch, while Mounjaro only had 8101 prescriptions in its fourth week of launch. However, Wegovy and Ozempic only received over 22000 prescriptions per week for three to four months after their launch.
Seigerman pointed out that this is a preliminary verification that Lilly's GLP-1 drug will dominate in 2024. "We have confidence in the superior efficacy, tolerability, and supply chain of telposide," he said.
The 2021 clinical trial data published in the New England Journal of Medicine showed that compared to the active ingredient of Wegovy and Ozempic, semaglutide, tirposide can cause more weight loss in patients, and common side effects such as nausea and diarrhea are milder.
On an annual basis, the prescription volume of GLP-1 drugs for Lilly will reach at least 16 million in 2024, and this number may increase significantly as Lilly strives to increase the supply of Zepbound.
The stock price is expected to rise by another 20%
BMO's rating of Lilly is "outperforming the market", with a target price of $710, which has a potential increase of about 20% compared to the current level. The bank has listed Eli Lilly stock as one of its top 15 preferred stocks.
On Tuesday, Lilly's stock price rose 1.59% to $592.2, with a current market value of approximately $562.2 billion. Over the past year, the price of the stock has risen by over 60%.
Last May, Lilly surpassed Johnson&Johnson to become the world's largest pharmaceutical company by market value.
Billionaire investor and co-founder of Home Depot, Ken Langone, recently stated that Eli Lilly is expected to become the first pharmaceutical company in history with a value exceeding trillions of dollars.