Eli Lilly and Company (LLY) saw its stock climb 2.35% to $1,385.56 in pre-market trading on Monday. Two developments fueled the early move: positive late-stage trial data for the company's oral weight-loss drug Foundayo in obstructive sleep apnea, and an increased price target from a major brokerage.

Eli Lilly reported positive Phase 3 results for Foundayo, its once-daily oral GLP-1, in adults with moderate-to-severe obstructive sleep apnea and obesity or overweight $LLY plans to submit Foundayo to the FDA for the treatment of obstructive sleep apnea by the end of 2026… pic.twitter.com/SaVRS7fawq

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Positive Phase 3 Results in Sleep Apnea

Lilly said its oral weight-loss drug Foundayo met the primary goal of a late-stage study. The trial examined obese adults with moderate-to-severe obstructive sleep apnea and evaluated the once-daily oral GLP-1 as a treatment for the condition.

According to the company, the pill cut breathing interruptions by up to 44% on average at 52 weeks. Lilly measured the outcome with a diagnostic scale used to gauge how severe a patient's sleep apnea is, and reported the headline figure as an average, with the 44% number marking the top end. Breathing interruption frequency served as the study's key efficacy measure.

GLP-1 drugs mimic a naturally occurring gut hormone that regulates appetite and blood sugar, a mechanism that underpins the current generation of obesity medicines. Lilly plans to submit Foundayo to the U.S. Food and Drug Administration (FDA) for the treatment of obstructive sleep apnea by the end of 2026.

Obstructive sleep apnea is a common sleep disorder in which the upper airway collapses repeatedly during sleep. Each collapse temporarily lowers oxygen levels and disrupts breathing, and in severe cases the episodes can occur dozens of times per hour. Against that backdrop, the 44% figure carries weight beyond trial statistics: fewer interruptions per hour means fewer of the oxygen-dipping episodes that define the disorder.

A Pill Gets a New Job

Foundayo is best known as a weight-loss pill. This study tested it on a related health problem, giving the drug a second story to tell beyond obesity.

The trial ran for a complete 52 weeks, meaning the results reflect a full year of use. With the end-of-2026 submission plan in place, the sleep apnea bid now has a timeline to follow as the data move from company-reported Phase 3 findings toward regulators.

Jefferies Moves the Bar

On the Street, Jefferies raised its price target on Lilly from $1,610 to $1,700, which is now the highest target on Wall Street for the drugmaker.

The firm based its call on the market outside the United States, arguing that market could be at least as large as the American one. The reason: there are far more high-income consumers abroad. Jefferies estimates the pool of potential patients outside the U.S. could be about twice the size of the American market.

The brokerage also pointed to several factors that could work in Lilly's favor. These include higher realized prices as patients move up to higher doses, stronger margins outside the U.S., favorable economics for oral medicines, and Lilly's broad lineup of obesity treatments.

Jefferies also took aim at a common view of the field. In its words, the main misconception is "treating GLP-1s as commodities." The firm says obesity is increasingly a consumer-driven market, where patients pick treatments based on efficacy, tolerability, convenience and price. Foundayo's once-daily pill format dovetails with the convenience criterion in that list — one of the attributes the firm says patients actually weigh.

In Jefferies' view, Lilly does not need deep price cuts to spark demand in every market, though adoption abroad is expected to take longer than it did in the United States.

Market Reaction

Investing.com data showed Lilly stock up 3.26% on the day at the time of its report. Lilly announced the sleep apnea results on Monday. The gap between the two readings is a matter of timing rather than a separate move: the 2.35% print reflects pre-market trading, while the 3.26% figure captures where the stock stood when Investing.com published.

Source: Blockonomi