Eli Lilly & Co. (NYSE:LLY) shares fell 3.8% on Monday following a recent study revealing that patients who discontinue the use of the company's obesity drug, Zepbound, tend to regain half of the weight they initially lost after a year.
Lilly’s biggest rival in this market, Novo Nordisk (NYSE:NVO), saw its stock pull back 0.6% today.
Analysts at BMO say the pullback in obesity stocks is a buying opportunity.
“These data were announced in EASD in October, were well-received by then (we were
there),” analysts said.
“Concern over post-treatment weight regain is overblown, the expectation that a chronic condition resolves without chronic treatment is unreasonable, reflecting our "obesity exceptionalism" framework that continues to present long-term investors with buying opportunities like this one,” they added.
Similarly, analysts at Evercore ISI told clients that this is an old study, which is very well understood by investors.
“Nothing has changed. There is no news today,” they said in response to today’s market reaction.