Team Metabolic Health
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Novo Nordisk and Eli Lilly have so far dominated the booming market for a class of weight loss and diabetes drugs.
But Eli Lilly may be starting to gain an edge over its Danish competitor in the two-horse race to capitalize on the soaring demand for those treatments, also known as GLP-1s.
That became clear last week after the pair reported their respective second-quarter earnings.
“Lilly is pulling ahead in the metabolic duopoly,” BMO Capital Markets analyst Evan Seigerman said in a research note Thursday.
On Aug. 7, Novo Nordisk trimmed its full-year profit outlook after reporting that quarterly sales of its weight loss injection Wegovy came in well below Wall Street’s expectations. The disappointing result came due to higher-than-expected price concessions to pharmacy benefit managers, which negotiate drug discounts with manufacturers on behalf of insurers, executives said on a conference call last week.
Revenue from its blockbuster diabetes drug Ozempic also failed to meet estimates for the period. The company’s stock plunged.
Still, Novo Nordisk slightly increased its guidance for full-year sales growth.
Eli Lilly’s quarterly report one day later was an entirely different story. The Indianapolis-based company’s weight loss injection Zepbound and diabetes treatment Mounjaro smashed expectations for the second quarter.
An Eli Lilly & Co. Zepbound injection pen, March 28, 2024. (Bloomberg/Getty Images)
Eli Lilly hiked its 2024 revenue outlook by $3 billion and raised its full-year profit guidance on the strong performance of Zepbound and Mounjaro and “improved clarity” into the company’s production expansions for those drugs.
Unlike Novo Nordisk, Eli Lilly benefited from higher U.S. prices of Mounjaro in the quarter as use of savings card programs for the drug decreased. Executives said they expect “stable pricing” for Mounjaro and Zepbound across the last two quarters of 2024.
Eli Lilly shares closed more than 9% higher Thursday.
Credit: CNBC