New York, Feb 7, 2026, 10:22 EST — The market has closed.
- After a choppy couple of sessions linked to knockoff weight-loss drugs, Eli Lilly shares finished Friday up 3.7%.
- The FDA flagged plans to crack down on compounded GLP-1 copycats—a move that could benefit branded drugmakers.
- The spotlight now turns to regulators—will they act, and how quickly will competitors head to court?
Eli Lilly and Company finished Friday’s session $37.34 higher, up 3.7% at $1,058.18 a share.
U.S. regulators have turned up the heat on pharmacy-made “compounded” weight-loss drugs—originally intended for shortages or specific patients, but now sold widely as alternatives. The FDA signaled it would crack down on telehealth company Hims & Hers, which had promoted a $49 pill as a Wegovy alternative. Lilly said it “applauded” the FDA’s move. 1
Why it matters now: Obesity and diabetes drugs are fueling big pharma’s growth, but investors face a new wrinkle—the rise of a lower-cost, nimble grey market. If the FDA cracks down on ingredients or clamps down on marketing, even hints of tighter regulation can rapidly swing forecasts for pricing power and where the market pie gets sliced.
The sector whipsawed again after Lilly shares tumbled roughly 8% the previous day, hit by news that Hims planned to offer a compounded take on Novo Nordisk’s Wegovy pill. By Friday, Lilly clawed back some losses as the FDA commissioner promised “swift action” against firms pushing unauthorized knockoffs. 2
Even so, investors are still left guessing just how far Washington might push. “Until this issue is resolved, it adds another level of uncertainty to the obesity investment story,” said Markus Manns, portfolio manager at Union Investment. TD Cowen analyst Michael Nedelcovych flagged the leeway compounders have enjoyed around minor tweaks, saying the door remains “pretty wide open.” 3
Thursday’s pullback? More about headlines than fundamentals, according to some investors. “Headline risk around GLP-1 will be around for quite some time,” said David Wagner, portfolio manager at Aptus Capital Advisors. As for Lilly, he noted, “when Lilly shares ultimately get hit… it tends to be a buying opportunity.” Morningstar’s Karen Andersen flagged another concern: if Hims is given the green light, similar companies may jump in, tracking each new branded obesity pill. 4
The $49 introductory price from Hims got attention, too. Reuters pointed out that after month one, the cost jumps to $99 for customers choosing a five-month deal. Hims shares slid again following the FDA commissioner’s post on social media. 5
Lilly bulls face a more straightforward risk here: even if regulators get tougher on compounding, the obesity drug space is already shifting into a price battle, with cash-paying patients and competitors pushing wider access. This week, The Wall Street Journal flagged a budding “price war” for GLP-1 drugs, warning net prices might drop faster than investors expect. 6
Traders going into Monday’s session (Feb. 9) want to see action, not more talk: actual warning letters, bans on certain ingredients, even court moves or regulator referrals. Without some clear follow-up, the copycat trade may resurface, stirring up fresh pressure on obesity stocks.
Lilly faces its next hurdle when markets reopen: will Friday’s bounce stick as investors dig through the regulatory noise to figure out what, if anything, shifts at the pharmacy counter?
