Goldman Sachs believes Eli Lilly's approval of its oral GLP-1 weight-loss drug, Foundayo, could drive significant long-term growth. The company maintains a "buy" rating with a target price of $1260, projecting substantial revenue increases through 2027 despite potential competition and pricing risks.

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2026-04-17 07:38:15

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Ask AI · Why does Goldman Sachs have a positive outlook on Eli Lilly’s GLP-1 drugs driving long-term growth?

Cailian Press, April 2 (Editor: Xia Junxiong) Goldman Sachs stated in its latest research report that with Eli Lilly’s oral weight-loss drug receiving early approval, the company will usher in a new key product cycle. Goldman Sachs maintains a “Buy” rating on Eli Lilly and sets a target price of $1,260.

Led by Asad Haider, Goldman Sachs analysts released a report on April 1, detailing the impact of the approval of Eli Lilly’s oral GLP-1 weight-loss drug Orforglipron (now named Foundayo) and the company’s financial outlook.

On April 1, local time, the U.S. Food and Drug Administration (FDA) approved Foundayo for market launch, ahead of the market expectation of April 10 (PDUFA date). This early approval aligns with Eli Lilly management’s plan that Foundayo will be approved in “early Q2 2026.”

According to Eli Lilly’s announcement, Foundayo is currently the only oral GLP-1 weight-loss drug that does not require fasting or dietary and water restrictions, taken once daily.

Trial data shows that regardless of trial completion status, subjects taking Foundayo lost an average of 25 pounds (11.1%), significantly better than the placebo group’s 5.3 pounds (2.1%).

Drug and Label Information

Goldman Sachs pointed out that the FDA’s label for Foundayo generally conforms to the existing framework for GLP-1 drugs, with no new risks in safety or usage restrictions.

The maximum approved dose on the label is 17.2 mg (once daily), while Lilly tested a highest dose of 36 mg in phase three clinical trials.

The reason for this difference is that the commercial drug is in tablet form, while the clinical trials used capsules. Tablet manufacturing is more efficient, uses less active pharmaceutical ingredient (API), and is more conducive to large-scale supply.

Lilly has completed bioequivalence studies showing that the 17.2 mg tablet and the 36 mg capsule are bioequivalent. Approval of the highest dose indicates that the efficacy data from phase three trials is fully reflected in the label.

Pricing Strategy

The report states that the direct-to-consumer (DTC) price range for Foundayo will be between $149 and $349 per month, depending on the dose.

(Lilly Foundayo Price)

Referring to Lilly’s previous promotional activities for Zepbound, consumers on the high dose who renew their prescription within 45 days can get the price reduced to $299 per month.

The price for lower doses (0.8 mg to 9 mg tablets) will be between $149 and $299, with no tiered discounts (price remains consistent).

Sales Forecast and Market Outlook

Goldman Sachs previously assumed that Foundayo would launch in the week of April 17, but with the drug’s early approval, the actual launch will be earlier, providing more buffer for sales ramp-up.

Based on median consensus forecasts from Bloomberg, sales of Foundayo are expected to reach $1.2 billion this year. Goldman Sachs believes this target is achievable, and the early approval provides a buffer to meet the goal and reduces the risk of missing it.

Goldman’s previous conservative forecast model showed that in the first 11 weeks, Foundayo’s sales would be about 50% lower than competitor Novo Nordisk’s oral Wegovy, but even so, the annual target can still be met.

Novo Nordisk’s oral Wegovy was approved in the U.S. in late December last year and officially launched in early January.

According to previous data released by Novo Nordisk, for patients who are obese or overweight with at least one weight-related comorbidity, they lost an average of 16.6% after 64 weeks of oral Wegovy treatment.

In the coming months, investors will focus on weekly prescription data released by IQVIA, which covers traditional sales channels and Lilly’s direct sales. However, initial sales may be underestimated due to missing telehealth data, similar to other new drug launches.

Valuation and Investment Rating

Goldman Sachs analysts maintain a “Buy” rating on Eli Lilly, with a 12-month target price of $1,260 (based on a 30x P/E multiple). As of the close on April 1 (Eastern Time), Lilly’s stock price was $954.52, implying about 32% upside.

(Goldman Sachs Revenue Outlook)

Goldman Sachs expects Lilly’s full-year revenue in 2026 to reach $81.64B, with EPS (earnings per share) of $33.93; in 2027, revenue is forecasted at $97.71B, with EPS of $42.10.

According to analyst estimates, Lilly’s EBITDA (earnings before interest, taxes, depreciation, and amortization) will continue to grow significantly, tripling from 2024 to 2027, indicating the company is in a high-growth cycle, with GLP-1 as the core driver.

Potential Risks

Goldman Sachs analysts listed three main risk factors for Lilly.

First is pricing risk, where the annual price decline in the weight-loss drug market exceeds expectations.

Second is competitive risk, with external competition intensifying (e.g., Novo Nordisk), or internal execution issues leading to lower market share than expected.

Finally, pipeline risk: if subsequent R&D data underperforms, it could lead to long-term valuation compression.

(Cailian Press, Xia Junxiong)

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