TLDR
- Eli Lilly stock fell 3% Monday after an analyst flagged a liver failure case in the FDA adverse event database linked to its oral GLP-1 drug, Foundayo
- The case involved a 56-year-old male; Lilly has since dismissed the report, saying it was not related to Foundayo
- Multiple Wall Street analysts called the selloff overdone and said they would buy the dip
- Foundayo launched last month and has already reached 20,000 patients, with 80% new to GLP-1 drugs
- Lilly reported 125% Mounjaro revenue growth to $8.6B and 80% Zepbound growth to $4.1B in its latest quarter
Eli Lilly stock dropped around 3% on Monday morning after Evercore ISI analyst Umer Raffat flagged a hepatic failure case in the FDA Adverse Event Reporting System (FAERS) tied to Foundayo, the company’s newly launched oral GLP-1 drug.
The case involved a 56-year-old male and may have occurred on or before April 15. The report was submitted to the FDA on April 30.
LLY was trading near $934 in early Monday trade before partially recovering. Rival Novo Nordisk (NVO) rose around 2% on the news.
Raffat was clear that the case should not be viewed in isolation. He noted that hepatic failure cases have appeared across multiple GLP-1 drugs — Ozempic has 33 reported cases, Wegovy 15, Mounjaro 30, and Zepbound 2.
He said the “onus is on LLY” to ensure proper and fast review of liver cases to avoid confusion, especially given prior concerns around liver toxicity with other oral GLP-1 molecules, including one from Pfizer.
Lilly moved quickly to address the concern. The company dismissed the report after determining it was not related to Foundayo.
Wolfe analyst Alexandria Hammond backed Lilly’s position. She wrote that the pre-market reaction was “overdone” and said she would be a buyer on weakness.
Bernstein’s Christian Moore agreed. He said it was unlikely a liver toxicity signal was missed given the volume of clinical trial data generated for Foundayo, and also said he was buying the dip.
Foundayo’s liver profile has been tested across multiple studies, including the 2,800-patient ACHIEVE-4 trial, which investigated hepatic safety at the FDA’s request and found no safety signal.
Foundayo Launch Shows Early Momentum
Foundayo launched last month and has already reached 20,000 patients. A key detail: 80% of those patients are new to GLP-1 drugs entirely, suggesting the pill is expanding the market rather than cannibalizing injectable sales.
Foundayo holds a practical edge over Novo Nordisk’s oral Wegovy — it does not require an empty stomach, making it easier for patients to work into daily routines.
Lilly is also making progress getting the drug in front of healthcare providers and into common pharmacy channels.
Lilly’s Core Business Remains Strong
The selloff came despite Lilly reporting strong quarterly numbers last week. Mounjaro revenue jumped 125% to $8.6 billion and Zepbound climbed 80% to $4.1 billion.
Lilly holds roughly 60% U.S. market share in the GLP-1 drug class, helped in part by head-to-head study data showing superior weight loss versus competing drugs.
The company continues to advance additional weight loss candidates through its pipeline.
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