Eli Lilly Stock Rallies as Ventyx Deal Calms Wegovy Concerns

In the last few months of 2025, shares of pharmaceutical giant Eli Lilly and Company (NYSE: LLY) went on an undeniable hot streak. From the beginning of August 2025 to the end of the year, the stock rose 41%. Optimism surrounding Lilly’s current and developmental weight loss and diabetes treatments helped fuel the rally. Lilly also gave up relatively little in a drug-pricing deal with the Trump Administration that allowed it to secure tariff exemptions for three years.

As of the Jan. 12 close, Lilly shares are essentially flat in 2026. Despite this, the stock has actually seen a fair bit of volatility so far. This is a result of two key developments: one that markets reacted negatively to, and another that led to a strong upward move. Eli Lilly’s top competitor, Novo Nordisk A/S (NYSE: NVO), and a relatively unknown firm, Ventyx Biosciences (NASDAQ: VTYX), are causing investors to trade the stock up and down.

Novo’s “Wegovy Pill” Release Sends LLY Sinking

On Jan. 5, Novo Nordisk said its new “Wegovy Pill” was now available across the United States. Novo is now the first company to offer an oral weight loss treatment in the country. This news sent LLY shares down by approximately 3.6%, as there is now another treatment on the market with which the firm must compete. This was Lilly’s largest single-day down move of 2026.

Still, it’s not entirely unreasonable to call this drop a bit of an overreaction. The Food and Drug Administration approved the Wegovy Pill on Dec. 22, 2025. Novo also announced that day they would roll the treatment out in the United States in “early January 2026." Thus, investors should have already known the official release of the drug was coming soon. The prior availability of this information makes it a bit odd to see Lilly shares take such a large hit on Jan. 5.

However, the scale of the initial release may have surprised investors, leading to the sell-off in LLY shares. Right out of the gate, Novo is making the Wegovy Pill available through over 70,000 pharmacies. Lilly hopes to gain approval for its weight loss pill, orforglipron, "as early as Q2 this year."

LLY Posts Big Gain on Ventyx Deal

On the other side of the equation, Lilly saw its largest single-day up-move of 2026 on Jan. 7. That day, the Wall Street Journal reported that Lilly was in advanced talks to purchase Ventyx Biosciences. Lilly shares rose 4.1%. After the market closed, Lilly confirmed the WSJ’s reporting, saying it would buy Ventyx for $14 per share, or around $1.2 billion. The stock dropped around 2% on Jan. 8, giving back half of its prior day gain. However, the overall market reaction still looks moderately positive.

The market’s reaction is interesting. Acquisitions certainly don’t always lead to the purchasing company’s shares rising. And, in many cases, they can cause them to fall. For example, Lilly shares fell 2% on June 17, 2025, when the firm announced its $1 billion to $1.3 billion purchase of Verve Therapeutics. There must be something that investors particularly like about the Ventyx deal for shares to gain so significantly.

Ventyx is developing drugs designed to treat conditions driven by inflammation. This ties in nicely with GLP-1s, which can reduce inflammation. Harvard Health Publishing, a division of Harvard Medical School, highlighted a study from Nature Medicine. The study found that people taking GLP-1s lowered their incidence of several chronic diseases by 10% to 20%. This included heart failure and lung failure. Harvard associated these outcomes with reduced inflammation.

Notably, Ventyx released Phase 2 results on its drug VTX3232 in October 2025. In part of the study, researchers gave patients both VTX3232 and semaglutide, the clinical name for Novo’s Wegovy. They found that taking both treatments resulted in a “clinically meaningful benefit on inflammation” compared to taking semaglutide alone. Combining the two also resulted in a “statistically significant reduction in liver inflammation” for patients with ≥5% baseline liver fat.

VTX3232’s Potential: A Weight Loss Drug Add-On?

Given this data, Lilly may see a path to VTX3232 being an add-on treatment to its weight loss drugs, as it could help supplement inflammation reduction. If VTX3232 gained FDA approval, it could open up a new revenue stream that benefits from Lilly’s strong momentum in weight loss drugs. This is likely why Lilly shares gained meaningfully on reports of the deal. Still, whether VTX3232 or Ventyx’s other treatments will gain approval remains highly uncertain.

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The article "Eli Lilly Stock Rallies as Ventyx Deal Calms Wegovy Concerns" first appeared on MarketBeat.