Eli Lilly has a plan to dominate the GLP-1 weight reduction drug market — and it is succeeding.
It is Thursday morning, 11:50 a.m. ET — and Eli Lilly (LLY 15.66%) inventory is off to the races!
This morning, the Indianapolis-based pharmaceutical large introduced that its new GLP-1 weight reduction capsule, orforglipron, has “demonstrated statistically vital efficacy outcomes and a security profile per injectable GLP-1 medicines in profitable [ACHIEVE-1] Section 3 trial.”
Lilly shares are up 14.2% in response to the information, whereas shares of its rivals within the GLP-1 weight reduction market, Novo Nordisk (NVO -7.22%) and Viking Therapeutics (VKTX 0.04%), are falling 7.1% and 1.7%, respectively.
Eli Lilly’s new GLP-1 marvel drug
Earlier this week, as it’s possible you’ll recall, Pfizer (PFE 1.36%) admitted defeat in its personal effort to develop a GLP-1 weight reduction capsule, halting analysis on its danuglipron once-a-day oral drug after a affected person in its examine skilled a “potential drug-induced liver damage.” Lilly’s new drug, alternatively, appears to don’t have any such uncomfortable side effects and loads of good results.
As Lilly described in its press launch, orforglipron is “the primary oral small molecule glucagon-like peptide-1 (GLP-1) receptor agonist, taken with out meals and water restrictions, to efficiently full a Section 3 trial.” Medical information from this 40-week trial present that orforglipron helped scale back A1C blood sugar ranges in sufferers “by a median of 1.3% to 1.6%.” On the similar time, the once-daily oral capsule helped scale back sufferers’ weights by a median of seven.9% over the course of the trial.
What’s extra, Lilly factors out: “On condition that members had not but reached a weight plateau on the time the examine ended, it seems that full weight discount was not but attained.” So, orforglipron has the potential to ship even higher weight reduction when given extra time to work.
This all means that orforglipron is beneficial for each treating diabetes and weight reduction — and with no needles required.
Picture supply: Getty Photographs.
What this implies for Lilly
Lilly notes that the ACHIEVE-1 examine was solely the primary of seven deliberate Section 3 scientific research it can conduct to show the GLP-1 drug’s security and effectiveness for treating each diabetes and weight problems, without having for injections. The corporate is due to this fact nonetheless a methods away from commercializing the drug.
That stated, finishing the six remaining trials ought to give Lilly loads of time to ramp up manufacturing capability, such that it is going to be ready “to launch orforglipron worldwide with out provide constraints” — and be first in line to take action with an oral, once-a-day GLP-1 capsule.
What this implies for Novo Nordisk and Viking Therapeutics
Suffice it to say this may be an enormous accomplishment for Lilly, increasing the addressable marketplace for GLP-1 medication (by way of ease of supply, with no needles required) whereas promising that Lilly would have this market totally to itself — at the very least at first.
Sadly, what’s excellent news for Eli Lilly might be unhealthy information for traders in Novo Nordisk and Viking Therapeutics, each of which lag Lilly within the race to develop their very own easy-to-take GLP-1 weight loss supplements. (Each Novo and Viking are creating such capsules; they’re simply not as far progressed of their work as Lilly. At the moment, Novo has solely injectable GLP-1 medication in the marketplace — Ozempic and Wegovy — and Viking has neither.)
Lilly’s insistence on its intention to allow no provide deficit with the brand new marvel drug additionally signifies the corporate does not intend to provide a gap to Hims & Hers Well being (HIMS 1.04%) to horn in on the enterprise with a copycat oral GLP-1 capsule, because the smaller pharmaceutical firm efficiently did when filling a niche in provide of Lilly’s Mounjaro and Zepbound injectable GLP-1 medication.
Is Eli Lilly inventory a purchase?
Lengthy story quick, traders in Eli Lilly inventory are proper to be excited at the moment. I can not say I am enthusiastic in regards to the inventory’s sky-high 60-plus price-to-earnings valuation. Then once more, in the intervening time at the very least, Eli Lilly is operating away with the GLP-1 market and leaving Novo Nordisk, Viking Therapeutics, and even Hims & Hers within the mud.
Wealthy Smith has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Pfizer. The Motley Idiot recommends Novo Nordisk and Viking Therapeutics. The Motley Idiot has a disclosure coverage.
