Obesity Treatment Stocks Under Scrutiny After Eli Lilly's Upgrade

The recent earnings and outlook upgrade of Eli Lilly's obesity drugs have put the spotlight on other companies in the same space, particularly those that focus on metabolic disease. Madrigal Pharmaceuticals is one such company, which develops treatments for metabolic liver disease and aims to address serious liver damage linked to obesity and metabolic disorders.

The company has a long patent runway on its commercialized drug Rezdiffra and plans to move into combination therapy with an oral GLP-1 agent. However, it still carries significant losses and relies heavily on one main product. Despite this, valuation metrics suggest the stock is priced below some estimates of fair value.

Merck, another large-cap healthcare company, has also been impacted by the obesity and metabolic treatment trend. It has a wide range of treatments across various diseases but still relies heavily on its flagship cancer drug Keytruda. Recent results show revenue of $16.6b in Q2 2026 and higher 2026 sales guidance, yet profit margins have tightened.

Rhythm Pharmaceuticals focuses on treating rare genetic obesity disorders with its FDA-approved IMCIVREE. The company is expanding into new indications and geographies but still carries significant losses and relies heavily on a single commercial drug.