(Bloomberg) — Eli Lilly & Co. shares surged after data showed its experimental weight-loss pill worked as well as the Ozempic shot, bringing it one step closer to developing a needle-free alternative.
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The trial is one of several that Lilly is running to test the drug, called orforglipron, in diabetes, obesity and other related conditions like sleep apnea. Investors and analysts had expected it to work at least as well as Ozempic, the blockbuster diabetes shot from Novo Nordisk A/S.
The trial showed patients lost 16 pounds, or 7.9% of their body weight, over a 40-week period. That compares favorably with Ozempic, where diabetic patients on the highest dose lost roughly 6% of their body weight. Lilly said patients hadn’t yet reached a weight plateau at the time the study ended, indicating that patients might lose more weight. The pill lowered blood sugar levels by an average of 1.3%. Ozempic lowered blood sugar levels by 2.1%.
Lilly’s shares rose as much as 15% at the open of New York trading. Novo’s US-listed shares fell 8.4% following Lilly’s data. Hims & Hers Health Inc., which sells a compounded version of weight-loss shots, dropped 6.6%.
Obesity shots made by Novo and Lilly have been wildly popular, generating billions of dollars in sales. But drugs that can be taken by mouth, rather than injected, are considered the next frontier. It’s lured companies like Pfizer Inc. and AstraZeneca Plc to try to develop their own weight-loss pills, with varying degrees of success.
The results come days after Pfizer, which once angled for second place, was forced to abandon its most advanced weight-loss pill over safety concerns. Pfizer will likely have to acquire a smaller obesity contender if it hopes to compete with Lilly in the next few years, analysts have said.
Orforglipron could cement Lilly’s lead in the obesity drug market, which is expected to reach $130 billion by the end of the decade. Novo was first to market with Saxenda and then Wegovy, but Lilly has quickly closed the gap. Now, the company appears to be pulling ahead of its Danish rival to develop the next blockbuster weight-loss treatment.
The company’s main obesity trial won’t wrap until at least July, according to a clinical trial database. Those results are some of the most anticipated of the year.
Lilly “will remain the preeminent player in this category for a while as its lead over peers, both in Pharma and Biotech, widens on the back of this data.” Mizuho health-care specialist Jared Holz said in a note.
The company is moving quickly: It expects to submit orforglipron for weight management to regulators by the end of this year with the application for type 2 diabetes anticipated to come in 2026, the company said in a statement.
The data looks competitive from an efficacy point of view, with no apparent safety signals, “supporting potential blockbuster status,” said Bloomberg Intelligence’s John Murphy in a note. The results were toward the top-end of expectations and the limited safety data suggest good tolerability with no liver signals, he said.
“You see patients that may have the preference to starting an oral medication rather than an injectable; not only in the US, but there are many outside of US markets that are heavy into orals versus injectables,” Lilly’s Chief Financial Officer Lucas Montarce said at the Leerink Global Healthcare Conference in Miami earlier this year.
Lilly is confident that if orforglipron is approved it will be able to launch worldwide without supply constraints. Both Novo and Lilly had difficulty meeting demand for their shots last year.
Diabetes study
Patients with diabetes typically have a harder time shedding pounds, so Lilly executives have warned that results from this trial shouldn’t be used to directly assess the drug’s weight-loss potential.
“Based on prior studies of orforglipron, as well as other GLP-1 therapies, we expect weight loss in people with diabetes to be significantly less than in people living with obesity who do not have diabetes,” Chief Scientific Officer Dan Skovronsky said on an earnings call.
The safety profile of the pill was consistent with the GLP-1 class, said Lilly. The most common adverse events were gastrointestinal issues which were “generally mild to moderate in severity,” the company said. Treatment discontinuation rates were 8% at the highest dose and 6% at the lowest one.
Patients who received Lilly’s pill did not show signs of liver damage, the company said. Liver side effects scuttled Pfizer’s efforts to develop oral weight-loss medicines of its own, forcing the company to abandon two pills for which it had blockbuster ambitions.
–With assistance from Ashleigh Furlong and Damian Garde.
(Updates with shares trading.)
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