The selloff in Eli Lilly’s shares was “overdone,” according to RBC Capital Markets, which noted that the overall safety profile of Foundayo remains favorable.
A single case of hepatic failure associated with Eli Lilly’s weight-loss pill Foundayo has been picked up by the FDA’s adverse events monitoring system, raising concerns about the drug’s overall safety profile.
Investors appeared to be spooked by the toxicity, pulling the pharma’s shares down by as much as 3% before Monday’s opening bell, according to analysts at RBC Capital Markets. The analysts, however, urged level-headedness: “one liver case does not make a signal,” they wrote in a note later that day. Lilly’s shares have since normalized, closing the trading session up 0.48%.
Lilly, too, told BioSpace in an email that the event had been investigated upon report to the company and dismissed as not drug related.
“In line with our standard procedures, Lilly Global Patient Safety thoroughly assessed the individual report, which was submitted within days of commercial availability, and determined it was not reasonably related to Foundayo,” a company spokesperson said.
RBC called the selloff an “overreaction.”
The episode of liver failure was documented in the FDA’s Adverse Event Reporting System (FAERS), an expansive database that collects all reports of drug side effects. Anyone can log cases to FAERS, including doctors, manufacturers and even consumers. The FDA itself cautions that “there is no certainty that the reported event . . . was due to the product.”
Evercore ISI was likewise measured in its assessment of the liver failure, writing in a Monday note that “we cannot look at this single liver case in a silo … and such cases do tend to occur on other GLPs as well because of various confounding factors.”
Evercore analysts broke down known hepatic failure cases for other GLP-1 drugs, tallying 30 for Mounjaro and two for Zepbound, both of which are marketed by Lilly. For Novo Nordisk’s drugs, Evercore found 33 cases of liver failure associated with Ozempic and 15 with Wegovy.
The heightened vigilance over the liver safety of Foundayo—and other weight-loss treatments more broadly—is driven by the failure of Pfizer’s initial obesity push, both Evercore and RBC analysts explained.
The pharma had previously pinned its obesity hopes on the GLP-1 pill danuglipron, which was dogged by safety concerns throughout its relatively short development life. In December 2023, Pfizer abandoned a twice-daily schedule for danuglipron due to high rates of gastrointestinal side effects but continued on with the drug. Ultimately, liver injury risks cropped up that would prove fatal for the molecule. The pharma finally pulled the plug on danuglipron in April 2025.
Lilly said that Foundayo has been tested in 11,000 patients for up to two years across the clinical program that supported its approval. In seven Phase 3 trials for the drug, the liver safety profile was similar to placebo and comparator medicines.
“No cases of drug-induced liver injury (Hy’s Law) were observed and there was no hepatic safety signal,” the spokesperson told BioSpace. Hy’s Law is a medical principle that helps predict drug-induced liver injury.
