Eli Lilly’s Strategic Moves in the Weight-Loss Drug Arena

Eli Lilly US5324571083

While Eli Lilly continues to make headlines with significant partnerships and a dominant GLP-1 drug portfolio, its stock performance has recently entered a phase of consolidation. This comes even as the company announced a major collaboration with chipmaker Nvidia, highlighting a curious divergence between strategic announcements and market reaction.

Recent prescription figures from the U.S. market have sharpened the focus on the intensifying rivalry with Novo Nordisk. In its first week of availability, Novo Nordisk's newly launched oral Wegovy pill garnered 3,071 prescriptions. By comparison, Eli Lilly's injectable weight-loss drug, Zepbound, recorded approximately 1,300 prescriptions in a similar launch period. This data fueled investor concerns that Novo Nordisk might gain an early advantage in the oral GLP-1 segment, contributing to a stronger Friday performance for Novo's shares compared to Lilly's modest gain.

Despite near-term competitive pressures, Lilly's stock remains positioned above its key moving averages, though it currently trades about 6% below its 52-week high. This reflects a period of consolidation following a robust year of performance.

Building a Long-Term Edge with AI

Concurrently, Eli Lilly is aggressively investing in its future pipeline. The company revealed an extensive five-year, $1 billion partnership with Nvidia. The collaboration will establish a joint AI research hub in the San Francisco Bay Area, leveraging Nvidia's new "Vera Rubin" chips and the BioNeMo platform. The objective is to dramatically accelerate the training of AI models for biological systems. CEO David Ricks framed this initiative as a potential game-changer, capable of fundamentally shortening the traditional drug discovery timeline.

Legal Hurdles and a Solid Foundation

The path forward is not without obstacles. On January 15, a antitrust lawsuit was filed targeting both Eli Lilly and Novo Nordisk. The complaint alleges the companies attempted to restrict patient access to more affordable, compounded versions of their weight-loss medications. These regulatory uncertainties have introduced additional volatility to the stock in recent trading sessions.

Fundamentally, however, Eli Lilly's position in the GLP-1 market is formidable. In the first nine months of 2025, its GLP-1 franchise—centered on Mounjaro and Zepbound—generated revenue of $24.8 billion, accounting for more than half of the company's total sales. Notably, in the third quarter of 2025, Zepbound's quarterly sales surpassed those of the competing therapy Wegovy, underscoring the significant commercial potential of its active ingredient, tirzepatide.

The Next Battleground: Oral Therapies and Future Catalysts

The competitive landscape is now shifting toward oral administration. Novo Nordisk's pill has been on the market since January 2026, but Eli Lilly is poised to follow. A U.S. Food and Drug Administration (FDA) decision on Lilly's own oral candidate, orforglipron, is anticipated in April 2026 (the second quarter). In parallel, the company is advancing its "triple-G" agonist, retatrutide. Clinical data for this drug has been promising, with some analysts projecting it could achieve annual sales exceeding $30 billion by 2031.

Investor attention is currently fixed on the upcoming fourth-quarter 2025 earnings report. The analyst consensus projects earnings per share of $7.49, representing year-over-year growth of 40.8%. Revenue is forecast at $18.21 billion, an increase of 34.6%. These estimates confirm that, despite a slight pullback since the start of the year and short-term underperformance versus Novo, the company's valuation remains squarely growth-oriented.

From a technical perspective, the stock is in a consolidation phase after a powerful twelve-month rally that saw shares advance more than 40%. The price currently sits roughly 6.9% above its 50-day moving average. The most significant near-term catalyst, however, will likely be the FDA's decision on orforglipron in April 2026. This event, combined with Q4 results and ongoing prescription trends for both Novo's pill and Zepbound, will be pivotal in determining whether the market re-rates Lilly's GLP-1 narrative higher or if the current consolidation persists.