Gilead stock jumped Friday after surprising Wall Street with preclinical test results for an under-the-radar weight-loss drug.
Evercore ISI analyst Umer Raffat said Gilead Sciences hasn't been hyping the potential rival to Eli Lilly and Structure Therapeutics. Instead, the company posted the results from testing in monkeys in a poster ahead of the American Diabetes Association annual meeting later this month.
"I literally read that twice to confirm it," he said in a report. "And yes, indeed, Gilead has an oral GLP-1 approaching Phase 1."
Over the course of 36 days, monkeys who received Gilead's weight-loss pill lost about 6.5% of their body weight. Their food intake decreased by roughly half, Raffat said in a report. Rough comparisons suggest Gilead's weight-loss drug could be more potent than Pfizer's danuglipron and equally as potent as Lily's orforglipron.
On today's stock market, Gilead stock advanced 3.6% to 65.06. Shares touched a ceiling at their 50-day moving average, MarketSurge shows.
Gilead Stock: A Huge Weight-Loss Drugs Market
There are some caveats to the results, Raffat said.
Gilead doesn't disclose the actual doses used in its 36-day weight-loss experiment in monkeys. The company also didn't note whether it used diabetic monkeys.
But Raffat kept his outperform rating on Gilead stock.
The weight-loss leaders — Novo Nordisk and Eli Lilly — sell injectable drugs. Experts say there's room for more players, especially with Novo's and Lilly's drugs still in shortage. Oral drugs will also be key in markets where refrigeration storage is a challenge. Further, some patients would prefer oral drugs over shots.
Goldman Sachs said recently the market for weight-loss drugs could be worth $100 billion by 2030. In 2029, the latest year for which there are data, analysts polled by FactSet expect Lilly's Zepbound to bring in $20.33 billion in sales, leading $18.22 billion from Novo's Wegovy.
Gilead stock has been under pressure this year, falling almost 22% on a year-to-date basis. But the market for weight-loss drugs could be a boon.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
