Should You Buy Eli Lilly Stock Before April 10?

Eli Lilly (NYSE: LLY) has climbed in recent years as growth investors piled into the stock. Generally, big pharmaceutical companies aren't known for delivering enormous levels of growth and instead may gain at a more measured pace. Lilly has stood out, however, thanks to one product portfolio in particular: its weight loss drug portfolio.

This pharma powerhouse sells tirzepatide, marketed under the name Mounjaro for type 2 diabetes and as Zepbound for obesity, and it's been bringing in blockbuster revenue. Demand has been high, even surpassing supply at certain points, as tirzepatide and rival semaglutide, sold by Novo Nordisk, have proven their ability to help people lose weight safely over a period of months.

Lilly stock has dipped this year, but over the past three, it's climbed more than 100%. And now, a new catalyst may be right around the corner -- on April 10. Should you buy Lilly stock before that date? Let's find out.

Image source: Getty Images.

Mounjaro and Zepbound

First, let's dive a bit deeper into Lilly's weight loss drug story. Tirzepatide first entered the market as Mounjaro, which doctors have prescribed off-label for weight loss, in 2022. More recently, the drug won regulatory approval specifically for weight loss under the name Zepbound. Tirzepatide is part of the GLP-1 class of drugs, interacting with hormonal pathways involved in the digestion process. It helps control appetite and blood sugar levels, helping patients shed pounds.

In the latest quarter, Mounjaro and Zepbound each delivered triple-digit revenue growth, and together, they brought in more than $11 billion for Lilly.

Before we get to the catalyst ahead, it's important to note that these drugs are available in an injection pen or in a vial that requires a syringe, and patients must give themselves an injection weekly.

Now, the catalyst: Lilly has submitted orforglipron, its oral weight loss candidate, to the U.S. Food and Drug Administration, and regulators are expected to issue a decision very soon. In fact, Reuters reported that the action date for the potential drug is April 10.

Today, Novo Nordisk sells a weight loss pill -- approved late last year -- but Lilly's offers greater convenience. While the Novo pill must be taken first thing in the morning without food, Lilly's orforglipron doesn't involve food and beverage restrictions.

A convenient weight loss drug

And a weight loss pill may be particularly sought-after by some patients because of convenience; it's much easier to take a pill on the go or when traveling than to bring along injectable drugs. Orforglipron is also easier and cheaper for Lilly to manufacture and store, so it could become a higher-margin product for the company.

Orforglipron delivered solid trial results, so there's reason to be optimistic about the FDA's upcoming decision. Could an approval on April 10 send the stock higher? And does that mean you should rush to get in on Lilly shares?

An approval could offer Lilly stock a lift, particularly since its valuation today, after declines, is more attractive than it was a few months ago.

LLY PE Ratio (Forward) data by YCharts

So, investors might be eager to jump in at this level, especially with the idea that the new product could drive additional revenue growth in the quarters to come. Analysts predict that the weight loss drug market could reach almost $100 billion by the end of the decade, so this growth story is far from over. And Lilly, which holds 60% of the U.S. market, is well positioned to benefit.

All of this means that it's a great idea to buy Lilly shares right now -- but you don't have to rush to get in before April 10. When investing, it's crucial to choose quality stocks and hold onto them for the long term, and when you do this, short-term stock movements won't have much impact on your returns.

So, whether you buy Lilly stock today or after April 10, you could be making a fantastic long-term investing move.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.