HSBC has upgraded Eli Lilly (NYSE:LLY) to Hold from Reduce, noting the latest Phase 3 trial success of the U.S. pharma giant’s once-daily weight loss pill orforglipron, developed with Chugai (OTCPK:CHGCF) (OTCPK:CHGCY).
Data from LLY’s Phase 3 ATTAIN-2 trial indicated on Tuesday that the oral GLP-1 receptor agonist caused up to ~11% of weight loss over 72 weeks at the highest dose in adults with obesity or overweight and type 2 diabetes.
Following a head-to-head analysis between orforglipron and Novo Nordisk’s (NVO) oral diabetes medication Rybelsus, HSBC argued that ATTAIN-2 “in diabesity appears to offer a clear commercial path for filing and commercialization.” “On balance, the orfo profile seems competitive to Rybelsus in diabesity,” the analysts added.
Citing ATTAIN-1 trial data that led to a selloff in LLY shares early this month, HSBC argued that “market expectations for orforglipron peak revenues are more sensible now” after 2032 consensus revenue estimates dropped to $15.5B from $20B in June.
Noting that the Street’s expectation for the drug could be close to its $10B peak sales estimate, the firm reiterates that the market opportunity for orforglipron is smaller and cuts to consensus estimates to continue. HSBC also increased its price target for LLY to $700 from $675 per share.