Eli Lilly and Company shares fell 0.9% to $1,035.54 during Tuesday morning trading, reversing earlier gains as the market digested the pharmaceutical giant's latest strategic initiatives. The stock fluctuated between $1,032.21 and $1,054.31 during the session.
Strategic Expansion into Early-Stage Science
The company announced two significant deals this week that expand its research footprint. Lilly agreed to acquire Orna Therapeutics for up to $2.4 billion in cash, gaining access to technology that aims to create cell therapies inside the body rather than through traditional laboratory methods. This in vivo approach seeks to address the complexity, cost, and logistical challenges of current ex vivo cell therapy techniques.
Simultaneously, Lilly strengthened its presence in China through a strategic oncology and immunology collaboration with Innovent Biologics. The agreement includes $350 million in upfront payments to Innovent, with potential milestone payments reaching approximately $8.5 billion. Innovent will lead development programs through Phase 2 completion in China.
Obesity Drug Competition Intensifies
These developments come as competition in the lucrative obesity treatment market accelerates. Kailera Therapeutics and partner Jiangsu Hengrui Pharmaceuticals reported that an experimental oral obesity drug helped patients lose up to 12.1% of body weight in a mid-stage study in China. This GLP-1 class drug represents another entrant in a field that already includes Lilly's experimental oral treatment orforglipron and Novo Nordisk's oral Wegovy.
Lilly recently reported strong financial performance, forecasting 2026 earnings of $33.50 to $35 per share and revenue between $80 billion and $83 billion, driven by demand for Mounjaro and Zepbound. However, management cautioned that pricing pressures could weigh on future results.
Analysts have noted that the Orna acquisition represents a high-risk venture into unvalidated technology, with BMO Capital Markets highlighting competition from Bristol Myers Squibb, AbbVie, and Gilead in the cell therapy space. The milestone-heavy structure of both deals could prove expensive if development programs succeed.
Investor attention now turns to regulatory developments, with the U.S. Food and Drug Administration expected to decide on Lilly's weight-loss pill orforglipron by April 10, 2026. This decision represents the next significant catalyst for the company's obesity treatment portfolio.
