Eli Lilly (LLY), the pharmaceutical company, filed lawsuits against three medical spas and online vendors. These include Pivotal Peptides, MangoRx, and Genesis Lifestyle Medicine, for selling products claiming to contain tirzepatide, the active ingredient in its popular weight-loss drug Zepbound. Some of these products were even sold in novel forms, such as dissolvable tablets.
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These lawsuits are the first legal actions related to copycat tirzepatide since the U.S. Food and Drug Administration (FDA) removed the drug from its list of medicines in short supply earlier this month. However, Lilly clarified that these lawsuits were not filed after the drug’s removal from the shortage list and could have been filed regardless of the supply status of these drugs.
How Was Tirzepatide Being Marketed?
Now let us look at how these online vendors and medical spas were marketing tirzepatide. Pivotal Peptides marketed its version as “research grade” tirzepatide, while MangoRx offered a compounded formulation online (when drug ingredients are combined with others or altered). Genesis, a medical spa, not only sold compounded tirzepatide but also administered it to customers, according to the lawsuits.
Furthermore, LLY accused Pivotal Peptides of directly selling tirzepatide products to patients without requiring prescriptions despite marketing them for research purposes. The lawsuits, filed in federal and state courts in Indiana, Texas, and Washington, allege false advertising and deceptive promotion. In fact, Lilly revealed that it had previously sent a cease-and-desist letter to Pivotal Peptides.
Following the letter, Pivotal Peptides temporarily took down its website and shifted its sales operations to email, social media, and word of mouth.
Tirzepatide Was Being Sold in an Oral Version and in Compound Form
Lilly has also stated that MangoRx was selling an oral version branded as “Trim” without any supporting research to prove its safety or effectiveness. MangoRx was doing this when the FDA, to date, has only approved tirzepatide as an injectable drug. Furthermore, the drugmaker criticized Genesis for marketing a compounded tirzepatide that was combined with vitamin B12.
Lilly has argued that such a compounded tirzepatide could pose significant health risks for consumers as such combinations are “untested, unproven, and expose consumers to an unjustifiable risk of harm.”
Through these lawsuits, Lilly seeks court orders to halt the sale of these unauthorized products and is pursuing unspecified monetary damages.
Is LLY a Good Stock to Buy Now?
Analysts remain bullish about LLY stock, with a Strong Buy consensus rating based on 18 Buys and two Holds. Over the past year, LLY has surged by more than 50%, and the average LLY price target of $1,048.67 implies an upside potential of 14.2% from current levels.
