Eli Lilly and Company’s LLY stock was down around 1.9% on Wednesday in response to a letter from the FDA that instructed the company to “provide additional safety data” on its newly approved oral GLP-1 weight-loss pill Foundayo (orforglipron). The letter mentioned that Lilly should provide more safety data to understand potential risks related to use of the pill, including risks of liver injuries and major adverse cardiovascular events like heart attack and stroke.
Foundayo was approved by the FDA and launched earlier this month and is now widely available via LillyDirect and telehealth platforms as well as across U.S. retail pharmacies. Lilly reportedly claims that in clinical studies, use of Foundayo has not been associated with any drug-induced liver injury.
Oral pills are expected to be a more convenient alternative to the once-weekly injectable GLP-1 obesity treatments like Lilly’s Zepbound and rival Novo Nordisk NVO Wegovy. Oral pills may significantly lower treatment burden and potentially broaden patient adoption versus injections. They can also be manufactured at scale to meet global demand, which, in turn, can drive billions in additional sales.
In the letter, the FDA also asked Lilly to track cases of a rare type of thyroid cancer in the United States for at least 15 years. Labels of Wegovy and Zepbound carry FDA boxed warnings regarding the risk of developing a rare thyroid cancer. The FDA has also asked for more information about delayed gastric emptying associated with the use of Foundayo.
NovoNordisk had gained approval for an oral version of its obesity drug, Wegovy, in December 2025 and launched the pill in January 2026. However, NVO, in its approval letter for Wegovy, was not asked to provide any additional data on heart risks, liver injuries, or thyroid cancer risks. This is likely because the Wegovy pill contains the same active ingredient — semaglutide — already used in Ozempic and Wegovy injection. In contrast, Foundayo is based on a new drug, orforglipron, which may warrant closer scrutiny.
Lilly’s stock has risen 12.7% in the past six months compared with the industry’s increase of 10%.
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Will FDA’s Need for More Data Hurt Foundayo’s Prospects?
Foundayo can prove to be a commercial game-changer for Lilly with the potential to bring in $1 billion-$2 billion in sales as early as 2026. Such post-approval requirements are routine and do not mean that there is any safety issue with the use of Foundayo. However, the FDA’s request for more safety data may affect decision-making among doctors, payers and patients for Foundayo.
In international markets, Lilly expects to launch orforglipron for obesity during 2027. For the type II diabetes indication, Lilly has filed a regulatory application in the EU and plans to file regulatory applications in the United States and other countries later in 2026.
Lilly is also evaluating orforglipron in late-stage studies in other disease areas like obstructive sleep apnea, osteoarthritis pain of the knee, stress urinary incontinence and hypertension. These multiple late-stage studies on orforglipron can expand the candidate’s revenue potential beyond obesity/type II diabetes.
Race to Make Oral Obesity Pill
While Lilly and Novo Nordisk currently dominate the obesity space, smaller biotechs like Structure Therapeutics GPCR and Viking Therapeutics VKTX are also developing oral GLP-1 drugs for treating obesity.
Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity. Viking plans to advance oral VK2735 into phase III development for obesity in the third quarter of 2026.
Structure Therapeutics’ phase II ACCESS study on its orally GLP-1 RA, aleniglipron, demonstrated significant weight loss across all doses. Structure Therapeutics expects to initiate the late-stage program of aleniglipron in obesity in the second half of 2026.
Lilly’s Zacks Rank
Lilly has a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).