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HomeMarketEli Lilly and Novo Stock Sold Off. Don't Blame Their Diet Drugs.

Eli Lilly and Novo Stock Sold Off. Don’t Blame Their Diet Drugs.

Eli Lilly’s chief scientific officer said oral versions of a new class of weight-loss drugs will help the industry reach a billion people worldwide who suffer from obesity.

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Stock in
Eli Lilly
Novo Nordisk
outperformed last year, largely because of remarkable demand for new drugs that drive weight loss in patients afflicted with diabetes and obesity.

Both stocks were lower this week, after the companies reported December quarter results. Lilly (ticker: LLY) was off 4% through Thursday, to $330.70, on investor disappointment that the quarter’s sales were affected by reduced need for the company’s Covid antibody treatments. Novo (
) slid 6% to a Thursday close of $132.34.

But the companies’ conference calls were consumed with talk of the weight-loss drugs, known as GLP-1 drugs or incretins, which allowed patients to lose as much as 20% of their weight in clinical trials. Until a month ago, a shortage of supplies was limiting sales of Novo Nordisk’s GLP-1 injectables Ozempic and Wegovy. On its Wednesday call, Novo executives said prescription growth shows no signs of slowing.

“Patients have been lined up,” said Novo Chief Executive Lars Jorgensen. “That’s a quite unusual situation to have.”

While analysts pressed the company for a 2023 sales forecast for the GLP-1 drugs, management didn’t respond directly. The company said its overall 2023 sales will grow 13% to 19% from the $26.5 billion it achieved in 2022 and that sales of the weight-loss products will largely determine where overall revenue growth ends up in that six percentage-point range, as well as whether it will land above it.

U.S. sales of Novo’s GLP-1 drugs grew by more than 50% in 2022. Chief Financial Officer Karsten Knudsen told Wednesday’s listeners that the latest data show sales continuing to rise at that rate. But he cautioned that “vertical” growth can’t last forever, so the company is alert for a tailing off in pent-up demand.

To catch up with demand, Novo is boosting its capital spending above historical rates. It has two production lines up and running, with another expected in the first half of this year, and a fourth to come in the second half.

Much of that production will serve to step up the supply of the weight-loss product Wegovy, said Novo’s CFO, but the company is also preparing to supply oral versions of its GLP-1s. The company will report the results of Phase 3 trials of these pills in this year’s first half, and Novo and its rivals expect demand for these non-injectables to be big.

On Lilly’s Thursday morning call, its chief scientific officer Daniel Skovronsky said that an oral version of these weight-loss drugs will help the industry reach the 100 million Americans and one billion patients worldwide who suffer from obesity. But he thinks that pills will lag behind injectables in how much weight-loss they drive, because injectables can target multiple mechanisms to control appetite. The first incretin drug to target more than one regulator of appetite was Lilly’s recently-approved diabetes injectable Mounjaro.

In the clinical trial that led to its June launch for diabetes, Mounjaro allowed patients to lose over 20% of their weight, on average. Mounjaro sales soared to $279 million in the December quarter, and Lilly’s financial chief Anat Ashkenazi told his listeners that 75% of the drug’s new prescriptions were for patients who had never used a diabetes incretin. That could indicate that doctors are choosing to prescribe the drug off-label for weight-loss—a phenomenon that seems to also be driving sales of Novo’s diabetes GLP-1 Ozempic.

“We’re not done innovating on behalf of people with obesity,” said Lilly’s science chief Skovronsky. “There’s a lot we can still do.”

Write to Bill Alpert at


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