Regulatory and Legal Headwinds Challenge Eli Lilly’s Momentum

Pharmaceutical giant Eli Lilly faces mounting pressure from two distinct fronts, testing its recent growth trajectory. A significant regulatory delay for a key drug and a fresh antitrust lawsuit have emerged simultaneously, creating near-term uncertainty for the company. These developments arrive at a pivotal moment, as competition intensifies in the lucrative multi-billion dollar market for GLP-1 therapies.

On January 14, 2026, compounding pharmacy Strive Specialties filed an antitrust lawsuit against Eli Lilly and Novo Nordisk in the U.S. District Court for the Western District of Texas. The complaint alleges the two drugmakers colluded to restrict patient access to more affordable, compounded versions of their popular GLP-1 medications.

The legal filing centers on several key accusations. It claims the companies established exclusive agreements with major telehealth platforms, effectively blocking those platforms from working with compounding pharmacies. Furthermore, the suit alleges interference in the compounders' relationships with payment processors and technology firms, alongside a public campaign to disparage compounded GLP-1 preparations as unsafe.

Eli Lilly has forcefully denied the claims, labeling the lawsuit as "factually and legally incorrect" and an attempt to deflect from the plaintiff's own conduct. This legal skirmish is part of an ongoing conflict; Lilly had previously sued Strive in October 2025 in an Arizona federal court over alleged misleading advertising. A separate case in Delaware was dismissed that same month on jurisdictional grounds.

FDA Postpones Key Decision on Oral Weight-Loss Drug

Compounding the challenges, the U.S. Food and Drug Administration (FDA) has pushed back its decision date for Eli Lilly's oral weight-loss drug, orforglipron, to April 10, 2026. The agency had previously been expected to rule by the end of March. This delay represents a notable setback in Lilly's direct competition with Novo Nordisk, whose rival oral therapy, Wegovy, received U.S. approval and began its rollout in late 2025.

The postponement carries significant commercial weight. The market for weight-management pharmaceuticals is projected to reach an annual value exceeding $150 billion within a decade. Oral medications are seen as crucial for expanding the potential patient pool. Novo Nordisk is now aggressively capitalizing on its time advantage to solidify Wegovy's market position.

Although the new date remains within the FDA's priority review framework designed for expedited decisions, the shift highlights broader capacity constraints within U.S. drug approval pipelines currently affecting several pharmaceutical firms.

Should investors sell immediately? Or is it worth buying Eli Lilly?

Stock Performance Reflects Mounting Pressures

The dual announcements of the FDA delay and the new lawsuit triggered a short-term pullback in Eli Lilly's share price. The stock closed a recent session at approximately $1,033, marking a noticeable decline from its recent peak. However, broader context is important: the equity remains nearly 100% above its 52-week low from August 2025 and shows a twelve-month gain of over 40%.

Technical indicators suggest a short-term oversold condition, with the Relative Strength Index (RSI) reading at 28.5. Despite the recent correction, the share price continues to trade above all major moving averages, underscoring that the dip follows an exceptionally strong prior rally.

Strategic Expansion Continues Unabated

Despite these regulatory and legal headwinds, Eli Lilly maintains a vigorous strategic expansion pace. On January 12, 2026, the company announced a $1 billion partnership with NVIDIA to establish an AI co-innovation lab. The collaboration aims to leverage NVIDIA's BioNeMo platform and Vera Rubin infrastructure to accelerate drug discovery and tackle complex pharmaceutical challenges through data-driven approaches.

This move followed another major strategic play. Just days earlier, on January 7, 2026, Lilly confirmed a definitive agreement to acquire Ventyx Biosciences for roughly $1.2 billion. The acquisition bolsters Lilly's pipeline with several oral small-molecule drugs targeting inflammation-related conditions, strategically diversifying its portfolio beyond its dominant cardio-metabolic business into chronic inflammation treatments.

GLP-1 Market Dynamics Grow More Intense

The competitive landscape for GLP-1 drugs is becoming increasingly fierce. During the recent J.P. Morgan Healthcare Conference, Novo Nordisk's CEO, Mike Doustdar, estimated that approximately 1.5 million patients in the U.S. are currently using compounded GLP-1 medications. This is precisely the market segment that both Lilly and Novo Nordisk are attempting to address through their telehealth partnerships and legal actions against compounders.

The FDA's delay for orforglipron grants Novo Nordisk additional time to entrench Wegovy's first-mover advantage in the oral formulation space. In a market where early entry can be decisive, the tactical edge has shifted, for now. For Eli Lilly, the April 2026 FDA decision date now stands as a critical milestone: an approval could mitigate the current pressures, while a further delay or additional requirements would only serve to widen its rival's competitive lead.