Regulatory Hurdles and Legal Challenge Weigh on Eli Lilly Shares

Eli Lilly & Company faced a dual setback this week, sending its stock price lower. The pharmaceutical giant is contending with a delayed regulatory decision for a key drug candidate alongside a new antitrust lawsuit targeting its lucrative weight-loss business. On Thursday, the company's shares declined by 3.76 percent to close at $1,032.97, marking one of the more significant single-day drops within the S&P 500 index.

Adding to the company's challenges, a compounding pharmacy named Strive Specialties has filed a lawsuit against Eli Lilly and its rival Novo Nordisk. The legal complaint, submitted to a federal court in San Antonio on Wednesday, accuses the two firms of abusing their market dominance to systematically block patient access to more affordable, compounded versions of their weight-loss medications.

The suit alleges that exclusive agreements were forged with telehealth platforms to prevent the prescription of these alternative compounds. Eli Lilly has firmly rejected the accusations, stating the claims are "factually and legally incorrect."

FDA Review Timeline Extended

Separately, the U.S. Food and Drug Administration (FDA) has extended its review period for the experimental weight-management drug orforglipron. An approval decision for the oral tablet, initially anticipated by late March, has now been pushed back to April 10, 2026. Internal agency documents confirm the extended review timeline.

This delay postpones the potential launch of what is considered a highly promising product within Eli Lilly's portfolio. Unlike currently approved injectable treatments such as Mounjaro or Zepbound, orforglipron is administered in pill form, a feature analysts believe could offer a distinct competitive advantage.

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

Strategic Moves Overshadowed by Near-Term Pressures

The negative developments overshadowed recent strategic announcements from the company. During the J.P. Morgan Healthcare Conference, Eli Lilly highlighted its acquisition of Ventyx Biosciences for approximately $1.2 billion, a move intended to diversify its portfolio beyond weight management into chronic inflammation associated with metabolic diseases.

Furthermore, on January 12, the company revealed a five-year, $1 billion artificial intelligence partnership with NVIDIA. Despite these long-term initiatives, the immediate regulatory and legal concerns have exerted pressure on the stock, which now trades roughly 10 percent below its 52-week high recorded in early January.

Focus Shifts to Upcoming Catalysts

Investors are now looking ahead to several key dates. The new FDA decision deadline of April 10, 2026, for orforglipron is a primary focus, with CEO Dave Ricks recently expressing confidence that the agency would conduct its review "expeditiously." The progression of the antitrust lawsuit will also be closely monitored.

The company is scheduled to release its quarterly earnings on February 5, which should provide insight into its current financial performance. The majority of market analysts maintain a positive outlook, with a consensus recommendation of "Buy" or "Strong Buy," largely based on the company's leading position in the GLP-1 drug market.