Prosper Junior Bakiny, The Motley Fool
Sat, August 15, 2026 at 6:20 PM UTC
Key Points
Eli Lilly has a broad pipeline of weight-loss products that will help it maintain its lead in this area
The company should continue posting excellent financial results over the medium term
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Eli Lilly(NYSE: LLY) has been posting outstanding financial results over the past few years. The company owes this success partly to its work in the weight-loss market. Eli Lilly’s Zepbound is the leader in this niche and is growing sales rapidly. However, some investors fear that the party won’t last much longer. As new, competing weight loss drugs enter the market, Eli Lilly will lose market share and pricing power, leading to slower sales growth, or so the argument goes. The good news is that Eli Lilly is preparing for that possibility, and part of the company’s strategy is to develop weight loss medicines that cater to nearly every kind of patient. Here’s what investors need to know.
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Something for (almost) everyone
Zepbound was Eli Lilly’s first weight loss drug to earn approval. It’s a highly effective injectable medicine administered once weekly. But some patients don’t like needles. To cater to them, Eli Lilly developed Foundayo, an oral anti-obesity medicine that was approved in April. As the company points out, its strategy has worked: More than 80% of Foundayo prescriptions have been for patients who had never taken GLP-1s before
In other words, Foundayo helped Eli Lilly expand its market and reach people it otherwise wouldn’t have reached. Retatrutide, Eli Lilly’s next-gen medicine, may do the same. Although Zepbound is effective, retatrutide seems to be even better, based on phase 3 data the company has revealed. Retatrutide also showed strong results in reducing A1C levels in patients with diabetes, while reducing obstructive sleep apnea and knee osteoarthritis pain. Retatrutide won’t replace Zepbound for everyone
Rather, it will push the weight-loss ceiling higher and be an especially powerful option for patients who need substantially more weight loss or who have obesity-related complications (or both). In fact, even though it isn’t approved yet, Eli Lilly has already granted early access to retatrutide to some people. Eligible patients must be over 18, ineligible for retatrutide clinical trials, have refractory obesity, and have at least two serious or life-threatening obesity-related conditions. This is a market neither Foundayo nor Zepbound can reach.
Elsewhere, Eli Lilly is developing eloralintide, which, unlike its other medicines mentioned so far, isn’t a GLP-1 drug. Eloralintide mimics the action of the amylin hormone, which also helps regulate satiety. What’s the purpose of this drug? Traditional GLP-1s sometimes have significant gastrointestinal-related side effects. But in a phase 2 study, eloralintide posted GLP-1-like weight-loss efficacy numbers with improved tolerability
It could attract patients who want to avoid the side effects of other medicines. Lastly, Eli Lilly is looking to develop drugs that could be administered less frequently than once a week, while also investigating combination treatment for patients with obesity who also have diseases such as psoriatic arthritis
What this means for the stock
The weight loss market will become more competitive, but Eli Lilly’s pipeline is second to none, and the company should maintain its lead in this field for the foreseeable future. Meanwhile, the pharmaceutical giant continues to post excellent financial results. Eli Lilly’s second-quarter revenue grew by 48% year over year to $23 billion, driven by Zepbound and Mounjaro, the company’s diabetes drug
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Eli Lilly’s adjusted earnings per share were $8.38, 33% higher than the prior-year quarter. Eli Lilly increased its guidance for the full fiscal year 2026. The company now expects revenue between $85 billion and $87 billion, up from its previous estimate of $82 billion to $85 billion. Can the company keep that pace up?
The market certainly thinks so. Eli Lilly is trading at 33.9x forward earnings, versus an average of 18.5x for healthcare stocks. Given Eli Lilly’s current dominance in the weight-loss field and its deep pipeline in this area, that’s a defensible assumption, especially once we add that Mounjaro and Zepbound account for 65% of its revenue (as of the second quarter) and that product sales in other areas should also grow rapidly over the next few years. All of this suggests that Eli Lilly still has plenty of upside ahead.
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Prosper Junior Bakinyhas positions in Eli Lilly. The Motley Fool has positions in and recommends Eli Lilly. The Motley Fool has adisclosure policy
