Eli Lilly’s ($LLY) new weight loss pill is still in clinical trials and has not yet been approved by regulators. But that hasn’t stopped the pharmaceutical company from preparing for its launch.
According to regulatory filings, Eli Lilly has stockpiled $550 million worth of the weight loss pill, called “Orforglipron,” before it has reported the results of its late-stage clinical trial. Eli Lilly is referring to the stockpile as its “pre-launch inventory.”
Eli Lilly has said publicly that its weight loss pill is unlikely to receive approval from the U.S. Food and Drug Administration (FDA) for at least another year. However, the drug maker is anticipating that demand for the weight loss pill will be so great that it has already produced and stored more than half a billion dollars of the medication.
Big Demand
Analysts note that the only similar instance of such a large pre-launch inventory build occurred with Covid-19 vaccines in late 2020 and early 2021 as pharmaceutical companies such as Pfizer ($PFE) and Moderna ($MRNA) awaited FDA approval of those medications.
Eli Lilly has said that it wants to be out front and aggressive with the launch of the Orforglipron weight loss pill should it receive FDA approval. Competition in the weight loss drug space has been intensifying, with rival pharmaceutical companies Novo Nordisk ($NVO) and AstraZeneca ($AZN) also developing oral weight loss treatments.
LLY stock has risen 17% over the last 12 months.
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy rating among 17 Wall Street analysts. That rating is based on 16 Buy and one Hold recommendation assigned in the last three months. The average LLY price target of $1,015.85 implies 16.71% upside from current levels.
