Eli Lilly Shares Face Pressure Following Key Drug Review Delay

Eli Lilly US5324571083

Investors in Eli Lilly are navigating fresh regulatory headwinds as the new trading week begins. The U.S. Food and Drug Administration (FDA) has unexpectedly extended its review timeline for the crucial weight-loss drug candidate Orforglipron, a development that hands an advantage to rival Novo Nordisk in the highly competitive obesity medication market. After a month of significant share price declines, the market is now assessing the potential impact of this postponement.

Coinciding with the FDA's decision, the pharmaceutical giant is implementing a major adjustment to its global pricing strategy. According to reports, Eli Lilly plans to increase the list price for Mounjaro (Tirzepatide) in the UK's private market by approximately 170 percent starting in August 2025. This move aims to harmonize international price structures and address political pressure in the United States concerning drug price disparities between domestic and foreign markets. Costs for the UK's National Health Service (NHS) will remain unchanged.

The analyst community responded promptly to these developments on Monday. While Guggenheim reaffirmed its "Buy" rating on the stock, it slightly reduced its price target. Other firms, including UBS and Daiwa, maintained a more optimistic stance, highlighting the company's long-term potential. The current uncertainty is reflected in the technical chart data: a decline of over 15 percent across the past 30 days and a Relative Strength Index (RSI) reading of 28.5 signal that the equity is now in oversold territory.

The Critical Wait for an Oral Therapy

The primary cause of recent market nervousness is the FDA's delay of the Prescription Drug User Fee Act (PDUFA) date. A decision on the approval of the oral GLP-1 tablet Orforglipron was initially anticipated by the end of February 2026. The agency has now pushed this deadline back to April 10, 2026.

This deferral carries significant weight because speed is a critical factor in capturing share of the forecasted $100 billion market. Eli Lilly's chief competitor, Novo Nordisk, already secured approval for its oral version of Wegovy in December 2025, granting it a valuable first-mover advantage. Market experts largely interpret the delay for Eli Lilly as a temporary setback rather than a fundamental issue with the drug's profile. Nonetheless, shares reacted negatively to the news on Friday.

Underlying Fundamentals Stay Robust

Despite the regulatory holdup, Eli Lilly's core financial metrics remain strong. For the third quarter of 2025, the company reported earnings per share of $7.02, surpassing expectations by nearly 18 percent. Management also raised the quarterly dividend, underscoring confidence in the firm's cash flow generation even amid substantial investments in research and product launches. Further demonstrating the breadth of its pipeline, the FDA recently granted a Breakthrough Therapy Designation for one of Eli Lilly's cancer treatments, showing progress beyond metabolic diseases.

Market attention now turns to the quarterly report scheduled for early February 2026. Consensus estimates project earnings per share around $7.11. Crucially, investors will scrutinize management commentary on the revised timeline for Orforglipron and the sales growth momentum for key products Zepbound and Mounjaro. Until the new decision date of April 10, investor patience will be tested.

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