Eli Lilly's Foundayo Is Turning Heads: What Is Its New Diabetes Drug And Why It Matters Now

• The study compared Foundayo with insulin glargine in more than 2,700 adults with type 2 diabetes.
• Patients taking Foundayo had a 16% lower risk of major adverse cardiovascular events compared to insulin glargine.
• Lilly plans to submit the results to the FDA for approval as a treatment for type 2 diabetes by the end of the second quarter.

Eli Lilly and Company (LLY) just announced positive results from its Phase 3 ACHIEVE-4 trial, boosting confidence in its experimental diabetes pill, Orforglipron, branded Foundayo. The study compared Foundayo with insulin glargine in more than 2,700 adults with type 2 diabetes who were also overweight or at high cardiovascular risk.

The trial met its primary endpoint, showing that Foundayo was safer than insulin for major cardiovascular events. It also delivered better outcomes in several areas. Patients taking Foundayo had a 16% lower risk of major adverse cardiovascular events (MACE-4), including cardiovascular death, heart attack, stroke, or hospitalization for unstable and sudden chest pain, compared to insulin glargine.

Additionally, a pre-planned analysis showed the risk of death from any cause was 57% lower with Foundayo compared to insulin glargine. The drug also improved blood sugar control and helped reduce body weight.

Based on these results, Lilly plans to submit the results to the U.S. Food and Drug Administration (FDA) for approval as a treatment for type 2 diabetes by the end of the second quarter (Q2).

What Is Foundayo?

Foundayo is a once-daily oral GLP-1 receptor drug designed to help manage blood sugar and support weight loss. It is a small-molecule pill that can be taken without food or water restrictions, making it more convenient for patients.

Earlier this month, the FDA approved Foundayo for adults with obesity, or those who are overweight with related health issues. When combined with a reduced-calorie diet and regular physical activity, Foundayo helps individuals lose excess weight and maintain long-term weight loss, the company said.

FDA Asks For Additional Data

In a letter dated April 1, the FDA asked Eli Lilly to provide more data on potential liver injury linked to its newly approved weight-loss pill. The FDA also requires Lilly to run post-marketing studies to assess risks such as heart-related events and delayed stomach emptying.

Additional studies include testing drug levels in breast milk and using ultrasound to evaluate digestion-related effects.

What Did Retail Traders Say?

Retail sentiment on Stocktwits for Eli Lilly, which has seen a strong competition from Novo Nordisk (NVO) for weight loss drugs, has remained in the ‘bearish’ zone for a while. It was ‘extremely bullish’ three months earlier.

One user said the stock could climb to $950 by the end of today’s trading session. It is currently at $914.

Another user said LLY’s rivalry with NVO shifted to a “second front” where safety profiles and expanded indications dictate market dominance.

Year-to-date, the stock has shed around 16%.

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