Following a slight dip in the last session, Eli Lilly (LLY) shares gained ~5% on Monday as Leerink Partners upgraded the pharma giant, arguing that its recent pricing deal with the Trump administration will significantly expand coverage for its obesity drugs.
LLY (LLY) and its rival in the obesity space, Novo Nordisk (NVO), traded lower on Friday after the companies agreed to lower prices for their prescription medicines in the U.S. in exchange for Medicare and Medicaid access for their blockbuster weight-loss drugs.
Thursday’s deal “should significantly enhance obesity drug adoption prospects and more than offset lower pricing,” Leerink analyst David Risinger wrote, upgrading the stock to Outperform from Market Perform.
The analyst noted that the Indiana-based drugmaker expects the Medicare deal to expand potential candidates for obesity treatments in the U.S. by 40M, four times larger than its current 8.5M estimate for Americans on obesity drugs.
“We expect LLY to succeed in the price-for-volume game, given its tremendous scale advantages and growing obesity portfolio,” Risinger added, noting a potential launch of the company’s oral obesity drug orforglipron in 2027 and citing its other weight loss candidates, retatrutide and eloralintide.
“We anticipate launches of orforglipron in 1Q26, retatrutide in 2027, and eloralintide in 2028,” Risinger wrote as he raised his price target on LLY to $1,104.00 from $886.00 while increasing his revenue and EPS CAGR estimates for the company 2025-3030E based on higher obesity sales.