FDA Approves Eli Lilly's GLP-1 Weight Loss Pill Foundayo

The U.S. Food and Drug Administration has approved Eli Lilly's GLP-1 pill, a major milestone for the Indianapolis-based drugmaker and one that will test the market for new weight loss medications. Lilly said the once-daily pill, Foundayo, will start shipping from direct-to-consumer platform LillyDirect on Monday and will be available at pharmacies and on telehealth platforms "shortly after." People with insurance coverage could pay $25 a month with a coupon from Lilly, while people paying out of pocket could pay between $149 and $349, depending on the dose.

The approval comes just a few months after Lilly submitted the drug to the FDA as part of a program that grants speedy reviews for drugs that are considered national priority interests. That means Lilly will introduce Foundayo only about three months behind Novo Nordisk's Wegovy pill, setting the stage for the next battle between the rival drugmakers in the next frontier for GLP-1 drugs.

Lilly licensed the molecule, orforglipron, from Japanese drugmaker Chugai in 2018, paying just $50 million up front for global rights to the drug. But there are still questions about how big the drug will become. It doesn't produce as much weight loss as Lilly's best-selling shot Zepbound. Millions of people are already used to the routine of injecting themselves once a week.

Analysts estimate Foundayo sales will reach $14.79 billion by 2030, according to FactSet. That compares to expectations of $24.68 billion for the weight loss drug Zepbound and $44.87 billion for Mounjaro, which is marketed for diabetes in the U.S. and obesity and diabetes in the rest of the world.

The company's CEO said shots haven't been as big of a barrier to uptake as Lilly once thought they would be. He still sees Foundayo as an attractive option for people who would rather take a pill or who are searching for a lower price than the injectables. He sees it playing a role in maintenance, for people who achieve their goal weight with a shot and want to keep the weight off. And he sees Foundayo as a way to "reach the planet" without the manufacturing constraints or cold-chain requirements that come with Zepbound.

Foundayo is a small molecule whereas Zepbound and Wegovy are peptides, which require more intensive manufacturing processes, a barrier the CEO thinks will hinder generic versions of Wegovy that have recently launched in some other countries, including India. The drug does allow for scalability, and that will allow Lilly to launch this globally on the first instance. Lilly expects approval for Foundayo in more than 40 countries over the next year. The company since 2020 has invested more than $55 billion in manufacturing, which includes opening new sites and expanding existing plants to produce the pill.

In the U.S., Lilly will compete with Novo's newly launched Wegovy pill. Early demand for that pill has been stronger than expected, with Novo reporting more than 600,000 prescriptions in March. Novo's CEO said one of the earliest takeaways from the launch is that the pill appears to be expanding the obesity treatment market, drawing in new patients rather than converting existing ones from injections. Lilly's CEO agreed with that assessment and said Lilly doesn't care whether people take Foundayo or Zepbound.

Novo plans to argue that the Wegovy pill is more effective than Foundayo. The Wegovy pill showed around 16.6% weight loss on average in a late-stage trial, while Lilly's oral drug caused roughly 12.4% on average in a separate study, when analyzing patients who stayed on treatment. Lilly's Zepbound has consistently shown it can help people lose more than 20% of their body weight.

Meanwhile, Lilly plans to tout the fact that Foundayo can be taken at any time without any restrictions, while the Wegovy pill needs to be taken first thing in the morning on an empty stomach with only a few ounces of water. Where the two drugs are the same is the starting price. The lowest doses of both drugs will cost $149 for cash-paying customers thanks to an agreement the companies struck with the Trump administration last fall.