Eli Lilly Stock Falls as FDA Data Raises Questions
Eli Lilly (LLY) declined 3% on Monday, while Novo Nordisk (NVO) gained 2%. The move followed comments from Evercore ISI analyst Umer Raffat, who highlighted a liver-related case in the U.S. Food and Drug Administration adverse event database that could potentially create confusion around Eli Lilly’s drug.
FDA Adverse Event Case Explained
According to Raffat, a case of hepatic failure was recorded in the FDA Adverse Event Reporting System for Foundayo, Eli Lilly’s oral GLP-1 drug. The report involved a 56-year-old male and may have occurred on or before April 15, with submission to the FDA on April 30.
Context: Similar Cases Across GLP-1 Drugs
The analyst emphasized that such liver-related cases are not unique. Data shows that other GLP-1 drugs have also reported similar incidents:
- Mounjaro: 30 hepatic failure cases
- Zepbound: 2 cases
- Ozempic: 33 cases
- Wegovy: 15 cases
For broader serious hepatic events, Mounjaro and Zepbound combined reported 311 cases out of approximately 105 million prescriptions since Q3 2018. Meanwhile, Ozempic and Wegovy recorded 447 cases across roughly 150 million prescriptions over the same period.
Analyst View: Not an Isolated Concern
Raffat clarified that this single case should not be viewed in isolation, noting that such events can occur across the GLP-1 drug class due to multiple confounding factors.
Clinical Trial Data Supports Safety Profile
Eli Lilly’s drug Foundayo has undergone extensive testing, including the 2,800-patient ACHIEVE-4 trial. This study, conducted at the FDA’s request, specifically evaluated liver safety and found no significant hepatic safety concerns.
Responsibility on Eli Lilly to Address Concerns
Despite the reassuring data, Raffat stressed that Eli Lilly must ensure proper and timely evaluation of such cases in the commercial setting to prevent misunderstandings. He also referenced past concerns, including liver toxicity issues linked to other oral GLP-1 drugs from Pfizer and some elevated ALT levels seen in earlier Foundayo trials.
Analysts See Overreaction in Market
Wolfe analyst Alexandria Hammond noted that Eli Lilly has already dismissed the reported case after determining it was unrelated to Foundayo. She suggested that the stock’s pre-market decline may be exaggerated and indicated a buying opportunity.
Similarly, Bernstein analyst Christian Moore stated that it is unlikely a liver toxicity signal was missed during clinical trials, given the extensive data available. He also expressed confidence in buying the dip following the initial 3% decline.
Market Takeaway
Overall, while the FDA report initially weighed on Eli Lilly’s stock, analysts broadly agree that the reaction may be overstated. Existing clinical data and broader GLP-1 drug comparisons suggest no clear new safety signal, reinforcing confidence in the company’s long-term outlook.
