LLY's Taltz+Zepbound combo shows durable efficacy in PsA and obesity, but open-label data limits near-term impact

What happened

Eli Lilly announced 52-week results from its TOGETHER-PsA Phase 3b open-label trial showing that concomitant use of Taltz and Zepbound led to nearly three times the ACR50 response rate compared to Taltz alone in adults with psoriatic arthritis and obesity. The data, presented at ACR Convergence 2026 and published in Arthritis & Rheumatology, demonstrated improved and durable efficacy, patient-reported, and metabolic outcomes. While this reinforces Lilly's pipeline depth beyond cardiometabolic disease, the trial's open-label design and company sponsorship warrant a critical view. According to the latest DeepValue master report, Lilly faces near-term challenges including pricing pressure, uncertain Medicare contribution, and slower Foundayo oral ramp, which this news does not directly address. The report rates LLY as a WAIT with no margin of safety at the current price of $1,417.50 and suggests a more attractive entry near $1,250.

Implication

This news provides incremental support for Lilly's long-term pipeline expansion into immunology, but investors should remain cautious. The open-label design limits the strength of the evidence, and the combination involves two already-approved drugs, which may limit incremental revenue per patient. The DeepValue report highlights that the stock is priced for continued volume growth, Medicare-driven expansion, and a successful Foundayo ramp, none of which are directly improved by this trial. Price erosion on GLP-1s and uncertain oral uptake remain key risks. Therefore, while the news is mildly positive, it does not justify paying 45.9x earnings, and waiting for a pullback toward $1,250 or clearer catalysts is prudent.

Thesis delta

No significant shift in the investment thesis. This trial strengthens Lilly's long-term pipeline narrative by demonstrating efficacy in a new combination use, but it does not address the near-term drivers of valuation: GLP-1 pricing pressure, Medicare uptake visibility, and Foundayo oral ramp. The WAIT rating remains appropriate; the news reinforces pipeline durability but not near-term earnings power.