Eli Lilly $LLY Weight Loss Trial Falls Short, Stock Drops $95 Billion

Eli Lilly’s announcement of positive topline results from the Phase 3 ATTAIN-1 trial for orforglipron marks a pivotal moment in the race for effective oral treatments in the obesity space, yet the market’s swift rebuke suggests the data fell short of lofty investor hopes.

Trial Outcomes Under Scrutiny

The ATTAIN-1 study, involving over 3,000 participants with obesity or overweight conditions linked to medical complications, tested orforglipron as a once-daily oral GLP-1 receptor agonist. Results indicated an average weight loss of around 12.4% at the 72-week mark, meeting the primary endpoint for body weight reduction. Secondary measures, including improvements in cardiovascular risk factors, also aligned with expectations, positioning the drug as a viable contender in a market dominated by injectables.

Yet, this efficacy profile trails behind rivals like Novo Nordisk’s semaglutide, which has demonstrated weight loss exceeding 15% in comparable trials. Analysts had anticipated orforglipron to close that gap more aggressively, given its oral administration advantage—free from the food and water restrictions that burden some competitors. The data, while clinically meaningful, evoke a sense of tempered progress, underscoring the high bar set by existing therapies in this burgeoning field.

Market Reaction and Valuation Shifts

Shares of Eli Lilly tumbled sharply in response, closing down approximately 14% from the previous session’s $746.37, settling at $640.86 amid heavy trading volume exceeding 26 million shares—well above the 10-day average of 4.2 million. This decline erased roughly $95 billion in market capitalisation, bringing the total to about $575 billion as of 8 August 2025. Such a drop reflects investor sentiment that the trial results, though positive, did not justify the premium baked into the stock’s recent highs, which had touched $972.53 within the past year.

Comparing this to trailing performance, Lilly’s shares had surged over the prior 200 days, averaging $802.18, buoyed by optimism around its GLP-1 pipeline. The current price sits at the lower end of the 52-week range, just above the $633.20 low, signalling a potential inflection point. Forward earnings multiples, at 28.28 times projected EPS of $22.66, now appear stretched if orforglipron’s path to market faces delays or heightened competition.

Historical Context in Obesity Drug Development

Working backwards from this juncture, Lilly’s earlier Phase 2 data for orforglipron had shown promise with up to 14.7% weight loss, setting a benchmark that the Phase 3 results only partially met. This echoes patterns seen in prior trials, such as the 2023 readouts for retatrutide, which achieved 22-24% reductions but required a multi-agonist approach. The ATTAIN-1 figures, averaging 27 pounds lost across doses, highlight incremental gains rather than the transformative leaps investors craved, especially against a backdrop of semaglutide’s established dominance.

Past quarters reveal Lilly’s revenue growth fuelled by Mounjaro and Zepbound, with trailing twelve-month EPS at $12.32 reflecting robust demand. Yet, the obesity segment’s sensitivity to efficacy deltas means even slight underperformance can trigger volatility, as evidenced by the 17.38% dip from the 50-day average of $775.69.

Implications for Regulatory and Competitive Landscape

With plans to submit orforglipron to regulators by year-end 2025, the trial’s success on all key endpoints strengthens Lilly’s case for approval, potentially expanding access to non-injectable options. However, the weight loss magnitude—peaking at 12%—may limit its edge in a field where patients and payers prioritise outcomes. Analyst forecasts, such as those from Jefferies labelling this a “bear scenario,” project moderated sales potential, estimating peak revenues below the $5 billion some had modelled, contingent on real-world adherence advantages.

Sentiment from verified sources like BioSpace notes the results as “lukewarm,” aligning with a broader caution in biotech where oral GLP-1s must not only match but surpass injectables to capture share. This dynamic could pressure Lilly’s book value, currently at $16.64, as investors reassess the pipeline’s contribution to long-term growth.

Investor Considerations Amid Uncertainty

For institutional holders, the ATTAIN-1 data prompts a recalibration: while the drug’s safety profile appeared tolerable, with gastrointestinal side effects in line with class norms, the efficacy shortfall might delay market entry or necessitate combination strategies. Model-based forecasts suggest that if orforglipron achieves 10-15% market penetration by 2030, it could add $3-4 billion to annual revenues, but only if pricing holds against generics looming for semaglutide.

The session’s 20.11% retreat from the 200-day average underscores a pivot from euphoria to realism, with the buy rating of 1.7 (on a 1-5 scale) now tested. As Lilly navigates this, the focus remains on whether orforglipron can evolve from a solid contender to a category leader, or if it risks becoming another footnote in the obesity arms race.

References

ATTAIN-1: Orforglipron Achieves Up to 12% Weight Loss in Phase 3 Obesity Trial. (2025). HCP Live. Retrieved from https://www.hcplive.com/view/attain-1-orforglipron-achieves-up-to-12-weight-loss-in-phase-3-obesity-trial

Eli Lilly’s daily GLP-1 pill sheds 27 pounds in trial. (2025). Becker’s Hospital Review. Retrieved from https://www.beckershospitalreview.com/glp-1s/eli-lillys-daily-glp-1-pill-sheds-27-pounds-in-trial/

Eli Lilly’s closely watched obesity pill, orforglipron, shows around 12% weight loss, but trails Novo Nordisk. (2025). Inkl. Retrieved from https://www.inkl.com/news/eli-lilly-s-closely-watched-obesity-pill-orforglipron-shows-around-12-weight-loss-but-trails-novo-nordisk

Eli Lilly’s weight loss pill shows promise in late-stage trial. (2025). CBS News. Retrieved from https://www.cbsnews.com/news/eli-lilly-weight-loss-pill-trial/

Lilly’s Hotly Anticipated Oral Weight-Loss Drug Delivers ‘Lukewarm’ Results in Phase III. (2025). BioSpace. Retrieved from https://www.biospace.com/drug-development/lillys-hotly-anticipated-oral-weight-loss-drug-delivers-lukewarm-results-in-phase-iii

Lilly’s Oral GLP-1 Agonist Orforglipron Linked to Weight Reduction of 12.4% in Pivotal Phase 3 Trial. (2025). PatientCareOnline. Retrieved from https://www.patientcareonline.com/view/lilly-s-oral-glp-1-agonist-orforglipron-linked-to-weight-reduction-of-12-4-in-pivotal-phase-3-trial

Lilly’s Oral GLP-1 Candidate Demonstrates 27-Pound Average Weight Loss in Phase III Trial. (2025). Pharmaceutical Technology. Retrieved from https://www.pharmtech.com/view/lilly-s-oral-glp-1-candidate-demonstrates-27-pound-average-weight-loss-in-phase-iii-trial

Oral GLP-1 Drug Yields > 12% Weight Loss in Nondiabetic Patients With Obesity. (2025). TCTMD. Retrieved from https://www.tctmd.com/news/oral-glp-1-drug-yields-12-weight-loss-nondiabetic-patients-obesity

TacticzHazel – Value Investing [@TacticzHazel]. (2025, August 7). [Post on Eli Lilly (LLY) stock performance and orforglipron trial data]. X. https://x.com/xKloc/status/1602689767929413633

Additional analysis was informed by commentary from Michael Albert, MD (@MichaelAlbertMD), Stephan Guyenet (@sguyenet), Daniel Drucker (@DanielJDrucker), Sekar Kathiresan (@skathire), CNN (@CNN), and The Redacted Inc. (@TheRedactedInc) on X.