The United States Food and Drug Administration has approved Elie Lilly‘s GLP-1 pill, the company said, is a major milestone for the Indianapolis-based drugmaker and will test the market for new weight-loss drugs.
Lilly said the once-daily pill, Foundayo, would begin shipping from direct-to-consumer platform LillyDirect on Monday and would be available in pharmacies and telehealth platforms “shortly thereafter.” People with insurance coverage could pay $25 per month with a Lilly coupon, while people paying out of pocket could pay between $149 and $349, depending on the dose.
The approval comes just months after Lilly submitted the drug to the FDA under a program that grants expedited reviews for drugs deemed to be of national priority concern. That means Lilly will introduce its Foundayo only about three months after Novo Nordisk’s Wegovy pill, paving the way for the next battle between rival drugmakers in the next frontier of GLP-1 drugs.
“It’s a big moment,” Dave Ricks, CEO of Eli Lilly, said in an interview with CNBC. “We’ve obviously been working on this class of drugs for a while with the first GLP-1 drug 20 years ago and we’ve been improving since then. Here’s an option that’s not more effective… but it’s more accessible, it fits more easily into your daily routine.”
Lilly licensed the molecule, ouforglipron, from Japanese manufacturer Chugai in 2018, paying just $50 million up front for global rights to the drug. It doesn’t produce as much weight loss as Lilly’s best-selling vaccine, Zepbound, raising questions about how big the drug will become when millions of people seem content to inject once a week.
Eli Lilly Foundayo GLP-1 Weight Loss Pill.
Courtesy: Eli Lilly
Analysts estimate that Foundayo’s 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, marketed for diabetes in the United States and obesity and diabetes in the rest of the world.
Ricks said the shots haven’t been as big a barrier to adoption as Lilly once thought. He still sees Foundayo as an attractive option for people who prefer to take a pill or are looking for a lower price than injectables.
He sees this as playing a role in maintenance, for people who reach their goal weight in one go and want to maintain their weight. And he sees Foundayo as a way to “reach the planet” without the manufacturing constraints and cold chain requirements that come with Zepbound.
Foundayo is a small molecule while Zepbound and Wegovy are peptides that require more intensive manufacturing processes, a hurdle that Ricks says will hinder generic versions of Wegovy recently launched in other countries like India.
“[Foundayo] allows for scalability, and that will allow us to launch this globally initially,” Ricks said. “So today you can get the oral support [Wegovy] in the US, but you really can’t get it anywhere else. This will be marketed worldwide. Once we have regulatory approvals, we will have the scale necessary to provide the world with an oral GLP-1 inhibitor. »
Lilly expects Foundayo to be approved in more than 40 countries within the next year. Since 2020, the company has invested more than $55 billion in manufacturing, which includes opening new sites and expanding existing factories to produce the pill.
In the United States, Lilly will compete with Novo’s new Wegovy pill. Initial demand for the pill was stronger than expected, with Novo reporting more than 600,000 prescriptions in March.
Novo CEO Mike Doustdar told CNBC in February that one of the first takeaways from the launch is that the pill appears to expand the obesity treatment market, attracting new patients rather than converting existing patients to injections. Ricks agreed with that assessment and said Lilly doesn’t care whether people take Foundayo or Zepbound.
“We want people to take the medications that meet their health goals,” Ricks said. “If it has Lilly on the box, that’s our goal.”
Novo plans to argue that the Wegovy pill is more effective than Foundayo. The Wegovy pill caused weight loss of about 16.6% on average in a late-stage trial, while Lilly’s oral drug caused weight loss of about 12.4% on average in a separate study, when analyzing patients who remained on treatment. Lilly’s Zepbound has consistently been shown to help people lose more than 20% of their body weight.
Meanwhile, Lilly plans to tout the fact that Foundayo can be taken at any time without any restrictions, while the Wegovy pill must be taken early in the morning on an empty stomach with just a few ounces of water.
Where the two drugs are the same is the starting price. The lowest doses of the two drugs will cost $149 for customers paying cash, thanks to a deal the companies reached with the Trump administration last fall. And price is the most important factor for patients, said Dr. Nidhi Kansal, an obesity medicine physician at Northwestern Medicine.
“Unfortunately, price is what drives decision making between clinicians and patients regarding these drugs, because they are all great drugs and we have many options now, but it’s still a financial decision at the end of the day,” Kansal said.
The lower price and accessibility of a pill compared to an injection opens the market to occasionally interested patients, said BMO Capital Markets analyst Evan David Seigerman. Seniors with Medicare will be able to access Foundayo and other GLP-1 obesity drugs for $50 a month starting this summer under deals Lilly and Novo reached with the Trump administration. Ricks expects a “pretty robust” response to the program, which Lilly has incorporated into its financial forecast for the year.
Analysts say a successful launch of Foundayo is critical for Lilly’s stock to recover from its recent weakness. The company’s shares have fallen about 14% this year after a meteoric rise that briefly made Lilly the first healthcare company with a trillion-dollar market cap. Sales are a lagging indicator, so analysts will track prescriptions to monitor pill use, said Carter Gould, an analyst at Cantor Fitzgerald.
“If the scripts are going in the right direction and you see continued gains, I guess people will ignore any kind of turbulence. [the first or second quarter]”Gould said.
Another driving factor in Lilly’s performance this year is the upcoming release of its most potent obesity vaccine, retatrutide. The company has already shared late-stage data on the drug, but the largest trial is one that studies the treatment specifically for weight loss. If retatrutide meets its expectations, Lilly would be on its way to creating a portfolio of anti-obesity drugs.
“The future will be more choices, and that’s a good thing,” Ricks said. “And we hope it’s Lilly who presents these choices.”