- Novo shares sink to three-year low
- Positive data from rival oral pill
- If approved Lilly could launch in 2026
Danish obesity and diabetes specialist Novo Nordisk (NOVO:CPH) fell more than 7% on Tuesday (22 April), taking the shares to their lowest level since 2022, in response to positive trail data from US rival Eli Lilly’s (LLY:NYSE) experimental oral obesity drug candidate.
Lilly said its oral GLP-1 (glucagon-like peptide-1) orforglipron demonstrated ‘statistically significant’ results and a safety profile consistent with injectable GLP-1 medicines, in a late-stage clinical trial.
Diabetic patients taking the oral pill lost 16 pounds or 7.9% of their body weight over a 40-week period. This is more than similar patients shed in earlier studies of Novo’s rival diabetes drug Ozempic.
The news sent Lilly’s shares up 16% on 17 April, taking the yearly advance to 11%, a stark contrast to the 53% fall seen in Novo Nordisk shares.
POTENTIAL GAME CHANGER
Lilly CEO David Ricks commented: ‘As a convenient once-daily pill, orforglipron may provide a new option and, if approved, could be readily manufactured and launched at scale for use by people around the world.’
Oral weight-loss drugs are simpler and usually cheaper to make than injectable drugs because the molecules are smaller. This means Lilly could launch the new pill worldwide, without the supply constraints which have plagued the roll-out of injectable drugs.
In a research note, Jefferies analyst Akash Tewari told investors: ‘The data presents a best-case scenario for a blockbuster launch out of the gate.’
Lilly expects to submit regulatory data for orforglipron to treat weight-management by the end of the year with the submission for the treatment of type-two diabetes anticipated in 2026.
Novo and Lilly have established a significant lead against competitors in the race to develop effective weight loss drugs in a market which analysts predict could be worth $130 billion a year by the end of the decade.
Demonstrating the difficulty of developing effective and safe obesity drugs, rival Pfizer (PFE:NYSE) abandoned the development of its own daily oral pill danuglipron on 15 April after one patient in a study experienced liver issues.
This follows the company scrapping the development of its twice-daily weight-loss pill candidate in 2023 after a trial showed a high incidence of adverse side effects.
