Morgan Stanley: Eli Lilly's oral weight loss drug clinical trial data is impressive, maintaining target price of $1028

According to Zhitong Finance APP, Morgan Stanley published a research report stating that Eli Lilly (LLY.US) recently announced the Phase III clinical trial (ATTAIN-1) data for its oral GLP-1 receptor agonist Orforglipron (Orfor) for the treatment of obesity. The firm pointed out that Orfor has demonstrated excellent results in weight loss, improvement of cardiovascular metabolic indicators, and safety. The newly released data did not change its positive outlook on Orfor's prospects, maintaining an "Overweight" rating for Eli Lilly with a 12-month target price of $1,028.

Morgan Stanley stated that the complete data from the ATTAIN-1 clinical trial showcased Orfor's clinical value from multiple dimensions, including weight loss effects, improvement of metabolic indicators, changes in body composition, and safety.

In terms of weight loss effects, all three dosage groups experienced a plateau in weight loss between weeks 48 and 72. Although the duration of the ATTAIN-1 trial was longer, the weight loss effect at 72 weeks was comparable to that at 36 weeks in the Phase II trial. Researchers analyzed that this may be related to trial design and population differences, such as a male proportion of 36%. Notably, in Novo Nordisk's (NVO.US) OASIS 4 trial of oral semaglutide 25mg, weight loss also plateaued between weeks 48 and 64, with a male proportion of about 24%.

Regarding the improvement of metabolic indicators, Orfor significantly improved several cardiovascular metabolic risk factors, including waist circumference, systolic blood pressure, non-high-density lipoprotein cholesterol, and triglycerides. It also showed improvements in diastolic blood pressure, other lipid components, high-sensitivity C-reactive protein, glycated hemoglobin, fasting blood glucose, and fasting insulin, with a higher normalization rate of blood glucose in prediabetic patients.

In terms of changes in body composition, combined analysis of the Orfor treatment group data showed that 73.1% of weight loss was due to a reduction in fat mass, while 26.9% came from a decrease in lean body mass, with fat reduction being dominant.

Regarding safety and tolerability, the adverse reactions of Orfor were consistent with other GLP-1 drugs, primarily mild to moderate gastrointestinal events, mostly occurring during the dose escalation period. Liver safety assessments showed comprehensive monitoring of liver safety during the trial, with no clear drug-related liver injury found.

Morgan Stanley believes that Orfor is particularly suitable for the obesity population with a lower BMI (<35), as well as patients who prefer oral therapy or cannot access injectable medications, including patient groups in low- to middle-income countries, with market potential expected to be further released.

Overall, Morgan Stanley stated that the successful launch of Orfor, the expansion of its other weight loss drug tirzepatide in the obesity field, and the accelerated supply of automatic injectors may bring upside risks, while the failure of Orfor's development and strong competitive data may pose downside risks