Eli Lilly upgraded at Leerink on ’multiple waves’ of obesity drug adoption

Investing.com -- Eli Lilly shares were upgraded to Outperform at Leerink Partners, which cited “multiple waves of obesity treatment adoption drivers” and raised its price target to $1,104 from $886.

Medicare and Medicaid access by early 2027, alongside new drug launches, should reinforce Lilly’s leadership in the fast-growing obesity market, analysts led by David Risinger said in a note.

Leerink raised its 2026–2030 earnings estimates by 4–9% annually and boosted its long-term revenue and profit growth outlook, projecting a 15% revenue compound annual growth rate (CAGR) and 20% EPS CAGR through 2030.

“We expect Lilly to succeed in the price-for-volume game, given its tremendous scale advantages and growing obesity portfolio,” the analysts wrote, adding that lower direct-to-consumer pricing should support affordability and offset margin pressure.

The team also noted that the step-down in Medicare pricing to $245 per month is less severe than previously estimated, at just 20–35% below current Mounjaro pricing, which it said supports long-term volume growth and manageable margin impact.

Lilly estimates that its agreement with the U.S. government could add roughly 40 million new Medicare patients eligible for obesity treatment, compared with about 8.5 million currently on such drugs.

Leerink expects the company’s next generation of therapies — orforglipron in 2027, retatrutide, and amylin-based eloralintide — to expand its dominance across patient categories.

Orforglipron is expected to serve overweight and modestly obese patients as a low-cost diabetes option, tirzepatide remains the “workhorse” for obese patients, retatrutide is aimed at severe cases, and eloralintide targets patients who cannot tolerate GLP-1s or seek an off-ramp.

The latter showed 16.4% weight loss after 48 weeks in Phase 2 trials and is expected to launch in 2028 with risk-adjusted sales of $10.7 billion.

“Eloralintide is likely to be a mega-blockbuster,” the note says.

Medicare coverage starting in January 2027 “should be a powerful U.S. market driver,” analysts continued, supported by evolving health-authority guidelines that increasingly view obesity as a chronic condition requiring long-term pharmacological care.

Leerink’s revised 2026 revenue forecast now stands at $78.1 billion, up from $75.7 billion previously, with 2030 revenue seen reaching $125 billion.

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