Eli Lilly’s obesity drug beats rival in head-to-head trial – where Cramer sees stocks move next
New trial data has solidified the Club’s lead position, holding off Eli Lilly in the highly competitive obesity drug race. Zepbound, Eli Lilly’s obesity drug, beat its main rival Wegovy, made by Denmark’s Novo Nordisk, in the first head-to-head trial comparing fast-growing weight loss treatments. Patients on Zepound lost an average of 20.2% of their body weight after 72 weeks of treatment, compared to 13.7% for those who took Wegovy, Eli Lilly said in a news release Wednesday. Additionally, nearly 32% of people taking Zepbound lost at least a quarter of their body weight, compared to 16% on Wegovy, according to the Indianopolis-based pharmaceutical manufacturer. Shares of Eli Lilly, a longtime holding name, rose more than 2.5% on Wednesday, to about $833 each. Novo Nordisk rose by about half a percent. Zepbound and Wegovy belong to the booming class of obesity drugs known as GLP-1, which some on Wall Street expect to be worth at least $100 billion by the end of the decade. Originally used to treat type 2 diabetes, their weight-loss capabilities have captivated the public and Wall Street in recent years and propelled shares of Eli Lilly and Novo Nordisk to extraordinary highs. Lilly, in particular, rode the GLP-1 wave to become the world’s most valuable healthcare company, worth nearly $800 billion. The drugs mimic the natural hormone GLP-1 to help regulate blood sugar and suppress appetite, leading to weight loss. Zepbound’s active ingredient tirzepatide also targets a second hormone abbreviated GIP, which is believed to offer efficacy advantages over Wegovy. Both drugs are injected once a week. Indeed, the results released Wednesday by Eli Lilly aren’t necessarily a surprise given the existing pile of clinical trial data examining the two drugs in isolation. But given the necessary caveats when comparing independent trial results, it’s useful to officially see how Zepbound and Wegovy fare head to head. The peer-reviewed results are expected to be published next year. “We expect HTH (head-to-head) clinical trial results to help accelerate Zepbound’s market share gains relative to Wegovy,” Leerink analysts wrote in a note to clients Wednesday . The analysts added that they wanted to see what the tolerability of the two drugs was like – something that was not mentioned in Lilly’s press release. Novo Nordisk was first to market, with Wegovy receiving approval from the Food and Drug Administration for obesity in 2021. Its sister drug Ozempic, which shares an active ingredient with Wegovy called semaglutide, was approved for the treatment of type 2 diabetes in 2017. Ozempic is arguably the best-known GLP-1 drug and some people take it for weight loss purposes. The FDA approved Zepbound in November 2023. Lilly’s Mounjaro, which shares tirzepatide as an active ingredient, was approved for type 2 diabetes in May 2022. The success experienced by Novo Nordisk and Eli Lilly in the GLP-market 1 sparked a mad race in the pharmaceutical industry to find the next obesity drug. Novo and Lilly are aggressively defending their turf, investing billions of dollars to expand the manufacturing capacity needed to meet current demand, while also advancing clinical trials of next-generation treatments. Investors are expecting a critical update to Novo’s next-generation CagriSema by the end of the year, with hopes it could deliver more than 25% weight loss during a late-stage trial. The medicine combines a compound called cagrilintide and semaglutide. The lead product in Eli Lilly’s pipeline is retatrutide, which produced an average weight loss of 24% in a 48-week interim study published last summer. A phase three trial is underway. Ultimately, we feel even better after our decision to add to our position in Eli Lilly last week. Shortly thereafter, we received the very important news that the Biden administration proposed changes that would expand GLP-1 coverage to millions of Americans with Medicare. and Medicaid who currently do not have access to them. We now have trial results that show that Zepbound is, as we have long suspected, superior to Wegovy. Eli Lilly shares sold off last month amid concerns over President-elect Donald Trump’s nomination of drug industry critic Robert F. Kennedy Jr. to be America’s top health official. However, the stock is now up more than 14% since closing at around $727 apiece on November 18. Our trading restrictions prevented us from increasing our position that day, although we still communicated our desire to members. LLY YTD mountain Eli Lilly YTD “I think [Lilly stock] should get back to the $900 level,” Jim Cramer said Wednesday during the morning meeting. “I think the only determining factor is… [Lilly CEO] Does Dave Ricks have the capacity to meet demand? That’s really the problem.” Since hitting the market, Zepbound and Mounjaro have spent considerable time on the FDA’s drug shortage list. On Wednesday, however, the FDA said the shortages had been resolved. Lilly executives said in the release the company’s results as of late October suggest drug production capacity is expected to increase further in 2025. (Jim Cramer’s Charitable Trust is long LLY. See here for a full list. of the stocks.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade Jim waits 45 minutes after a trade alert is sent before buying or trading. sell a stock in his charitable foundation’s portfolio If Jim talked about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. INVESTMENT THE ABOVE ARE SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER. WITH OUR DISCLAIMER. 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A sign with the company logo sits outside the Eli Lilly and Company headquarters campus on March 17, 2024 in Indianapolis, Indiana.
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New test data consolidated the Club’s participation Elie Lillyis in pole position in the highly competitive race for obesity drugs.