Eli Lilly & Co. (LLY) has built what looks increasingly like an unassailable lead in obesity drugs, and according to Bank of America, Wall Street still hasn't caught up to where this is heading.
Analyst Jason Gerberry maintained his Buy rating on the stock Monday, lowering his price target modestly from $1,286 to $1,268. Don't read too much into that adjustment. With shares trading around $1,055, Gerberry still sees meaningful upside ahead as Lilly rolls out new obesity therapies and captures market share across what he calls "nearly every conceivable market segment."
Sure, everyone knows Lilly dominates the injectable GLP-1 space. But Bank of America thinks the real opportunity, and the real disconnect, is what's coming next.
The Oral Pill That Could Change Everything
Enter Orfoglipron, Lilly's oral weight-loss pill expected to hit the market in the second half of 2026 following expedited regulatory review. Bank of America is modeling $3 billion in revenue for Orfoglipron in 2026 alone. Street consensus? Around $1 billion. That's not a rounding error.
The difference matters because Orfoglipron solves real practical problems. No injections means no needles, no refrigeration, and crucially, easier global distribution. For patients hesitant about starting injections, it's a lower barrier to entry. For Lilly, it's a way to reach markets and patients that injectables simply can't access as easily.
There's also a competitive angle here. Expert feedback cited by the bank suggests Orfoglipron has a compliance edge over Novo Nordisk A/S (NVO)'s oral Wegovy because it doesn't require fasting before dosing. That might sound trivial, but when you're talking about long-term daily medication, ease of use drives adherence, and adherence drives outcomes.
To put the $3 billion forecast in context, Gerberry points out that Zepbound pulled in roughly $5 billion in U.S. sales during its first full year, even while dealing with supply constraints and limited insurance coverage. If Orfoglipron launches into a market with better infrastructure and broader access, that $3 billion starting point starts to look conservative.
The Medicare Deal That Unlocks Volume
Speaking of access, Bank of America sees Lilly's recent government pricing agreement as a strategic masterstroke, even if it pressures near-term margins. Under the deal, Medicare and Medicaid beneficiaries get access to obesity medications at a fixed net price of $245, which translates to about $50 per month out-of-pocket for patients.
Yes, that's a pricing concession. But it's also a volume play. Broader government access is expected to drive significantly higher patient numbers, and over time, commercial insurers will face mounting pressure to match that coverage or risk losing members. Bank of America expects pricing headwinds in 2026 and 2027 to be more than offset by patient growth, which reinforces Lilly's first-mover advantage in the obesity market.
Pipeline Beyond Orfoglipron
Looking beyond 2026, the growth story doesn't end with one oral pill. Lilly has multiple Phase 3 trials underway for retatrutide, its Triple G therapy, targeting obesity patients across different severity levels. Gerberry sees particular potential in the "super-obese" patient population, with or without serious comorbidities, and believes those segments alone could support peak sales in the high single-digit billions.
On the competitive front, Bank of America isn't worried about Novo Nordisk's upcoming head-to-head obesity study. The firm expects the results to show non-inferiority at best, which shouldn't meaningfully dent Zepbound's market position.
Putting it all together, Bank of America argues that Lilly's five- and seven-year sales growth trajectory justifies a premium valuation. The thesis rests on leadership in obesity, the Orfoglipron launch, expanding access through government and commercial channels, and a deep pipeline addressing multiple patient segments.
Even among the consensus bulls on Lilly, Gerberry's view stands out: as Orfoglipron gets closer to launch, the market still hasn't fully priced in just how big this next chapter in obesity could be. And if Bank of America is right about that $3 billion first-year revenue figure, the repricing might happen sooner than people think.
