Eli Lilly and Co (LLY) shares pushed higher on Friday as the pharmaceutical giant unveiled plans to completely rethink how it sells its blockbuster obesity drugs. Rather than relying on traditional distribution channels, the company is going straight to employers in a move designed to expand access to medications that can cost thousands of dollars per month.
A New Playbook for Weight-Loss Drugs
Starting January 1, companies will be able to purchase Zepbound and Wegovy through Waltz Health, a firm specializing in reducing medication costs. The program specifically targets employers who don't currently cover obesity drugs in their health plans, which represents a significant untapped market.
Waltz Health CEO Mark Thierer told Bloomberg that four employers have already signed up for the January launch, with an ambitious goal of covering 100,000 people by the end of the first quarter. While Thierer declined to reveal the exact negotiated prices with drugmakers, he made it clear they're highly competitive, calling this "the absolute cheapest way" for employees on company health plans to access these medications.
This isn't Lilly's first experiment with alternative distribution. Both the company and rival Novo Nordisk A/S (NVO) are already selling obesity drugs directly to patients online at prices well below standard rates. The direct-to-employer approach simply extends that strategy to the corporate benefits space. According to Thierer, several other companies have expressed interest in joining the employer program as well.
Wall Street Stays Bullish
Analyst sentiment toward Eli Lilly remains overwhelmingly positive. Truist Securities maintained its Buy rating on November 19, raising its price target from $1,038 to $1,182. JP Morgan followed suit with an Overweight rating and a $1,150 target, up from $1,050.
Morgan Stanley also weighed in with an Overweight rating and a $1,171 target on November 13, while Citigroup set the most aggressive target at $1,500 with a Buy rating. Not everyone is as optimistic, though. Freedom Capital Markets downgraded the stock to Hold from Buy on November 10, setting a more conservative $950 target.
Eli Lilly shares were up 2.14% at $1,065.66 at the time of publication Friday, hitting a fresh 52-week high.
