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Weight-Loss Medicines Are Supercharging Drugmakers

Incretins tame hunger and have allowed patients to shed an average of 15% to 20% of their weight.

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Two of last year’s strongest drug stocks were energized by weight loss.

While the overall equity market sagged in 2022,
Eli Lilly
(ticker: LLY) rose by 33% and Novo Nordisk (NVO) rose 25%. Much of the excitement was expired by their lead in a class of drugs known as incretins.

Developed originally as diabetes treatments, the injectable incretins were the first drugs found to cause dramatic weight loss. By targeting receptors in the gut and brain, incretins tame hunger and have allowed patients to shed an average of 15% to 20% of their weight. That’s led analysts to project eventual sales of tens of billions of dollars a year for the class, as the U.S. and other nations battle widespread obesity.

When Novo Nordisk’s Wegovy became the first incretin approved for weight loss, in 2021, demand quickly exhausted supply. Doctors started off-label prescribing of Novo’s similar product for diabetes, Ozempic. Lilly’s new incretin Mounjaro has also seen greater-than-expected demand after its diabetes approval in 2022. Consumers are telling each other about the products, in a kind of viral marketing.

Sales will continue to soar for all these products in 2023. Earlier this month, Novo Nordisk told the CBS news program 60 Minutes that the company can finally supply all dose levels of Wegovy. New prescriptions of Novo’s incretin products are growing at better than 60% year-over-year, wrote Guggenheim analyst Seamus Fernandez in a Monday note, including 82% growth in prescriptions for the diabetes version Ozempic.

Novo hopes more insurers will cover Wegovy, if results of a clinical trial expected this year show that weight loss prevented cardiac events. Other 2023 advances at Novo will include trial results on injectable and oral versions of a more powerful incretin product it calls CagriSema.

Meanwhile, new prescriptions are up nearly 300% for Lilly’s two incretins–Mounjaro and the earlier Trulicity, writes Fernandez. Since Mounjaro’s May 2022 approval, and studies in which patients lost over 20% of their weight, the Lilly injectable is getting 25% of the category’s new prescriptions.

At the
J.P. Morgan
healthcare conference early this month, Lilly said it hopes to get Food and Drug Administration approval for a weight-loss version of Mounjaro and launch the resulting product by the end of 2023. Meanwhile, the company is advancing clinical trials of additional incretins: a pill; and an injectable that targets more hunger receptors than Mounjaro.

The drugs aren’t cheap and insurers haven’t been eager to cover obesity drugs. Without insurance, some of the incretins can cost patients around $1,000 a month.

Lilly financial chief Anat Ashkenazi told the J.P. Morgan audience that a boost for the whole category would come if Congress passes the Treat and Reduce Obesity Act–driving insurance coverage for obesity drugs.

Investors will get updates on the incretins next week, when the companies report December quarter results. Novo Nordisk reports on Wednesday, Feb. 1. And Lilly will report the day after, on Feb. 2. Other drugmakers will doubtless start talking up the incretins that they have under development–among them
Zealand Pharm
(ZEAL), and

Guggenheim’s Fernandez has Buy ratings on both Lilly and Novo Nordisk. He’s got a price target of $406 for Lilly’s stock, which lately trades for $345. For Novo, his target it $154 for the stock, which has been going for $140.

Write to Bill Alpert at


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