The pullback in obesity drug stocks is excessive.

But as we’re also starting to see, short-lived.

Look at Eli Lilly (LLY).  Earlier this month, LLY dropped from about $750 to $625 after its oral weight-loss drug trial results disappointed investors. In fact, its late-stage trial data for its oral weight-loss pill, orforglipron, showed an average weight loss of 12.4%. This figure fell short of analyst expectations, which anticipated a result closer to 15%.

However, LLY is now starting to come back strong. All after the company said its oral weight loss therapy reached its main goals in its third Phase 3 trial, which now allows LLY to move forward with regulatory submissions for the once-daily GLP-1 receptor agonist.

Another hot, less expensive obesity drug stock to watch is Viking Therapeutics (VKTX).

Over the last few weeks, VKTX plummeted from about $40 to $26.05. All after the company posted mid-stage trial data on its obesity pill that fell short of expectations. 

However, analysts are still bullish on the stock.

As Viking Therapeutics pointed out, 98% of the adverse effects in the trial were mild to moderate. About 99% of gastrointestinal (GI) related issues were mild to moderate. A

lso, the company said the oral obesity pill resulted in an average weight loss of 12.2% at the highest dose after 13 weeks with no plateau observed. In addition, the company has said even more weight was lost at 16 weeks.

In short, the pullback in VKTX was a severe overreaction.

Sincerely,

Ian Cooper