Wall Street sees multi-billion dollar debut for Lilly's obesity pill despite Novo lead

By Mrinalika Roy

April 2 (Reuters) - Eli Lilly's LLY.N newly approved weight-loss pill is expected to generate billions in sales as soon as this year, with analysts betting it will quickly narrow Novo Nordisk's NOVOb.CO head start in the oral market.

Brokerages estimate 2026 sales of $1.5 billion to $2.8 billion of Lilly's orforglipron, branded Foundayo, with the wide range reflecting both an expectation of strong demand and uncertainty around the early stages of the launch.

Among the more bullish forecasts on Wall Street is Bernstein, which estimates the drug could generate $2 billion to $2.5 billion in its first full year. Citi analysts are even more upbeat, projecting about $2.8 billion in 2026 revenue and seeing peak annual sales exceeding $40 billion.

More conservative estimates include those from Guggenheim Partners, which projects around $1.5 billion for 2026.

But, even at the lower end, the pill is expected to reshape the competitive landscape.

UBS estimates that Lilly's drug and Novo's oral version of Wegovy together will generate about $5 billion in 2026, signaling the emergence of a sizable new oral class.

Foundayo comes with easier manufacturing and fewer dosing restrictions, positioning it as a strong challenger to Novo.

Strong demand for oral options and scalability advantages could help Foundayo become the leading pill option, especially internationally, J.P. Morgan analysts said, forecasting sales to surge to $6 billion by 2027.

However, early uptake may be tempered by launch dynamics.

Bernstein analysts noted that free sampling, lower initial dosing and pricing adjustments could weigh on near-term revenue even as prescription volumes ramp up. Weekly new-patient starts will be closely watched by the market as a key indicator of trajectory, they added.

Lilly has said it had $1.5 billion worth of pre-launch inventory to ensure stable supplies, reflecting lessons from past shortages of its injectables, Zepbound and Mounjaro.

The shortages enabled U.S. compounding pharmacies to produce copycat versions, creating a gray market. As supply improved , Lilly and the U.S. Food and Drug Administration moved to restrict such products over safety concerns. Lilly has since sued compounders, wellness centers and other companies for selling products claiming to contain tirzepatide.

Analysts expect Foundayo to be a preferred product with slightly better pricing, which will be counterbalanced by Novo's first-mover advantage and brand recognition.

In the long term, analysts see oral drugs expanding the reach of obesity treatments. Morningstar estimates obesity pills could account for about a third of a projected $180 billion global market by 2034.