Eli Lilly’s Strategic Moves in the Oral Obesity Drug Race

Eli Lilly US5324571083

As the year draws to a close, Eli Lilly is making decisive moves on two fronts: a strategic platform collaboration with South Korean biotech firm ABL Bio and a critical regulatory filing for its oral obesity drug candidate. These actions highlight the company's efforts to carve out a significant position in the emerging market for oral GLP-1 therapies, a space currently led by Novo Nordisk. Trading near an all-time high, Lilly's stock reflects a complex balance of opportunity and competitive pressure.

On December 18, 2025, Eli Lilly took a major step forward by submitting a New Drug Application (NDA) to the U.S. Food and Drug Administration for orforglipron. This investigational drug is a once-daily, oral, non-peptidic GLP-1 receptor agonist. The company aims to establish it as a widely accessible alternative to injectable treatments like its own Zepbound and Novo Nordisk's Wegovy, potentially simplifying weight management for patients.

The application is supported by data from the Phase 3 ATTAIN-MAINTAIN trial, which studied weight maintenance in patients switching from injectable to oral therapies. The results varied significantly based on prior treatment:

• Patients switching from Zepbound (tirzepatid) to orforglipron experienced an average weight regain of 11 pounds (5.0 kg).
• Those switching from Wegovy (semaglutid) to orforglipron saw an average regain of just 2 pounds (0.9 kg).

While switching from injections led to some reduction in efficacy compared to staying on them, the key finding was the comparison to stopping treatment altogether. Participants who switched to a placebo—simulating treatment discontinuation—regained approximately 20 pounds (9.1 to 9.4 kg). This suggests orforglipron may substantially mitigate the rebound effect common after stopping potent GLP-1 injections, particularly for patients previously on Wegovy, positioning it as a potential maintenance therapy.

Intensifying Competition with Novo Nordisk

The urgency behind Lilly's push for orforglipron has been amplified by a key competitor's advancement. Just days later, on December 22, 2025, Novo Nordisk received FDA approval for an oral version of its blockbuster drug, Wegovy. This grants the Danish rival a clear first-mover advantage in the high-dose oral obesity medication segment.

The competitive landscape is now defined by several dynamics:

• First-Mover Status: Novo Nordisk's oral Wegovy sets the initial benchmark for efficacy and pricing.
• Structural Potential for Lilly: Orforglipron is a small molecule, not a peptide. Lilly hopes this distinction may offer advantages in manufacturing scalability and cost compared to Novo's peptide-based pill.
• Therapeutic Niche: Data from the ATTAIN-MAINTAIN study indicates orforglipron could be particularly useful as a follow-on option for patients coming off Wegovy or as a maintenance therapy, even if its performance after Zepbound is less compelling.

Lilly now faces pressure to accelerate regulatory progress and a potential launch to prevent its competitor's lead from widening.

A New Biotech Partnership Takes Shape

In a separate strategic development, Eli Lilly has formally initiated a collaboration with ABL Bio. The company completed the agreed-upon upfront payment to the Korean partner, totaling $55 million. This sum comprises a $40 million payment for licensing and research rights and a $15 million equity investment in ABL Bio itself.

Through this deal, Lilly gains access to ABL Bio's proprietary "Grabody" platform. This technology is designed for developing bispecific antibodies and antibody-drug conjugates (ADCs), with intended applications beyond oncology—specifically in central nervous system disorders and potentially metabolic diseases. The collaboration includes success-based milestone payments that could reach up to $2.6 billion. The equity stake signals Lilly's view of this partnership as a long-term strategic component, not merely a licensing experiment.

Investor Activity and Market Performance

Institutional investors are also adjusting their portfolios as the year ends. Private Trust Co. NA reduced its holding in Eli Lilly shares by approximately 20.4%, selling 2,448 shares. Its remaining stake is valued at around $7.27 million. Such portfolio rebalancing is common at year-end, especially in a sector experiencing significant flux due to the new competitive reality in oral GLP-1 therapies.

Despite these adjustments, Lilly remains a market titan. Its market capitalization hovers near $1 trillion, buoyed by established blockbusters Mounjaro and Zepbound.

Valuation at Peak Levels

Eli Lilly's stock currently trades at $1,077.13, marking a new 52-week high. This represents a year-to-date gain of over 42%. The share price sits significantly above key moving averages—roughly 22% above the 50-day average and nearly 50% above the 200-day average—while the stock's 30-day volatility has exceeded 54% this year.

This valuation suggests the market has already priced in substantial expectations for the success of Lilly's oral pipeline and its new partnerships. Over the coming months, regulatory progress for orforglipron and concrete project updates from the ABL Bio alliance will be crucial in determining whether the company can sustain or even expand this premium valuation.