Instant View: Lilly’s obesity pill lags Novo’s Wegovy injection in key trial

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(Reuters) – Eli Lilly said on Thursday that its experimental GLP-1 pill helped patients lose 12.4% of their body weight after 72 weeks in a late-stage study, less than previous trial results for Novo Nordisk’s injectable obesity treatment Wegovy.

Lilly shares were down about 13% in early trading, while U.S.-listed Novo shares jumped over 7%.

UNION INVESTMENT PORTFOLIO MANAGER AND NOVO AND LILLY SHAREHOLDER MARKUS MANNS

“That is a best case scenario for Novo. Lilly’s efficacy is much lower than anticipated (11% placebo-adjusted) vs expectations of around 15% and the rate of vomiting is high (24% at the highest dose). The competitive threat from Lilly is suddenly much weaker than anticipated.

“Novo definitively will be able to sell more oral semaglutide than they envisioned before the Lilly data came out.”

BERNSTEIN ANALYST COURTNEY BREEN

“The weight loss demonstrated… for the top dose of 36 mg will be disappointing many investors as ~14% was expected.

“The adverse event profile was also slightly poorer than in (Lilly’s) ACHIEVE-1 diabetes trial, with 10.3% adverse-event-related discontinuations in the top-dose compared with 8% for the same dose for the type 2 diabetes patients. Vomiting appeared to be a culprit here.”

BMO CAPITAL ANALYST EVAN SEIGERMAN

“Overall, this falls into our bearish scenario. We expect Lilly shares (outside of the impact of earnings) to react negatively, while Novo shares are likely to appreciate, now showing slightly less competitive threat than initially feared.”

J.P. MORGAN ANALYST CHRIS SCHOTT

“While we expect some debate on the efficacy from today’s results (from Lilly), it is not clear to us that about 2 percentage point lower weight loss meaningfully changes the use case for orforglipron, and we would use this morning’s weakness as a buying opportunity for shares.”

SIMON CORK, SENIOR LECTURER IN PHYSIOLOGY, ANGLIA RUSKIN UNIVERSITY

“Effects on weight loss are not as profound as that seen in injectable GLP-1 receptor agonists such as Wegovy… Nevertheless, that this medication is an oral form, rather than injectable, will likely be seen as more tolerable for many patients.

“The manufacturing costs are also anticipated to be significantly lower than injectable drugs, meaning these medications may be more equitable in their availability.

“It should be noted these are preliminary, non-peer reviewed results and we will need to see the full trial methodology and data before a more comprehensive analysis can be undertaken.”

HARGREAVES LANSDOWN HEAD OF EQUITY RESEARCH DERREN NATHAN

“Lilly’s second-quarter results were in stark contrast to yesterday’s numbers from rival Novo Nordisk where the outlook reflected a downgrade from the previous week.

“Lilly’s growth in the last quarter was driven by its GLP-1 therapies for Zepbound and Mounjaro, which are stealing market share from Novo’s competing offerings. There was no mention of the threat from copycat ‘compounded’ versions either, which Novo had pointed a finger at as a key reason for its woes.

“While investors are choosing to focus on the outlook for the next wave of anti-obesity drugs, there’s still a long way to run in that race. In the meantime, Eli Lilly’s exceptional record of commercial execution shouldn’t be overlooked.”

ANDY T. HSIEH, WILLIAM BLAIR ANALYST

“From a stock perspective, we believe that Eli Lilly’s rare miss from its otherwise impenetrable obesity franchise could create an opening for smaller competitors in particular Viking Therapeutics, Structure Therapeutics, Zealand Pharma.”

(Reporting by Maggie Fick in London, Bhanvi Satija and Mrinalika Roy in Bengaluru; Compiled by Josephine Mason; Editing by Louise Heavens and Bill Berkrot)