New York, Feb 5, 2026, 10:33 (EST) — Regular session
- Eli Lilly shares dropped over 6% in morning trading following a steep rise the previous day
- A $49-per-month compounded Wegovy pill from Hims is raising fresh concerns over pricing pressure in the obesity drug market
- Attention turns to Lilly’s strategies for safeguarding margins amid rising demand and intensifying competition
Eli Lilly and Company shares dropped 6.2% to $1,038.52 in Thursday’s morning session, after fluctuating between $1,113 and $1,029 earlier.
The pullback came as investors reacted to a new low-cost player in the weight-loss space: telehealth company Hims & Hers Health announced it will launch a compounded version of Novo Nordisk’s Wegovy pill for $49 a month—about $100 less than branded alternatives. “More choice on the platform is the best thing for customers everywhere,” said Hims CEO Andrew Dudum in a statement. (Reuters)
This is crucial now since Lilly’s obesity franchise hinges as much on margins as on volume. Cheaper “compounded” drugs—custom-made versions with the same active ingredient but lacking FDA approval—can siphon off demand from branded products and push prices down, even if overall demand looks solid.
Lilly, known for its diabetes drug Mounjaro and obesity treatment Zepbound, recently gave bulls a fresh boost with a strong earnings report and upbeat forecast. The company projected 2026 revenue between $80 billion and $83 billion, with non-GAAP earnings per share—an adjusted profit figure—ranging from $33.50 to $35.00. CEO David A. Ricks described 2025 as “an important year for Lilly.” (PR Newswire)
On a call, CFO Lucas Montarce warned that price cuts are still hitting. “Price is expected to be a drag on (percentage) growth in the low- to mid-teens,” he said, citing a U.S. government access agreement on obesity medicines, updated direct-to-patient pricing, and lower Medicaid prices. BMO Capital’s Evan Seigerman noted the latest forecast highlights that Lilly and Novo “play in the same markets” but face “pressures [that] are not identical.” (Reuters)
Pressure hit the whole sector. Novo Nordisk’s shares on the U.S. market fell 6.8% in early trading.
Lilly investors face a clear challenge. Demand remains strong, yet pricing isn’t just climbing anymore. New outlets like cash-pay websites, subscription models, and compounded products are shaking up how quickly prices shift.
The “compounding” wave comes with a genuine two-sided risk. Should regulators crack down on widespread marketing of compounded semaglutide, branded companies might catch a break. On the flip side, if the market continues shifting toward cheaper alternatives, price pressure could intensify faster than Lilly’s volume gains can compensate.
Traders are weighing if the recent move is just a one-day pullback following Wednesday’s surge, or the beginning of a broader reassessment of how much profit obesity-drug leaders can sustain as competition shifts from pens to pills and from insurance to cash.
Lilly’s Q1 2026 earnings call is set for April 30. Investors will be watching closely for fresh updates on pricing, demand trends, and the rollout schedule for new products. (Gcs Web)
