It's always a relief when a drug shortage ends. It's even more of a relief when that shortage concerns a hot new drug produced by a high-profile pharmaceutical company.
That dynamic was behind the 3.5% increase of Eli Lilly's (NYSE: LLY) stock price on Thursday. Comforting words from the company's leader led investors to load up on the stock, making it a far better performer than the sliding S&P 500 index (which fell by 1.4% that day).
Bound for the market
That drug is Zepbound, the weight loss treatment that is one of Lilly's newest and hottest products. Due to the enormous popularity -- combined with scarcity -- of such goods, Zepbound had officially been in a shortage on the U.S. market. It's now set to change that status in the very near future.
"I think actually today or tomorrow we plan to exit that process," the pharmaceutical giant's CEO David Ricks said in an interview published Thursday morning in Bloomberg.
Zepbound and its twin, diabetes treatment Mounjaro, have been on the Food and Drug Administration's (FDA) shortage list since late 2022. This resulted in the explosion of demand following FDA approval of Novo Nordisk's Wegovy; like Zepbound, Wegovy is essentially its maker's diabetes treatment (Ozempic) approved and marketed for obesity.
Hot news for a hot drug
Lilly and Novo Nordisk are the two early movers in the glucagon-like peptide 1 (GLP-1) weight loss medication space. As such, they are currently the only stocks with approved products on the market. So what happens with Zepbound and Wegovy really matters -- even for Lilly, a long-established player in this market with a massive product portfolio that spans many therapeutic categories.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
Why Eli Lilly Stock Trounced the Market on Thursday was originally published by The Motley Fool