Novo shares rise for second day after Lilly obesity pills trails Wegovy in trial

Investing.com - Copenhagen-listed shares of Novo Nordisk (CSE:NOVOb) rose by more than 5% on Friday, extending gains notched in the prior session, after a weight-loss pill from chief rival Eli Lilly (NYSE: LLY) showed less effectiveness than its blockbuster Wegovy drug.

In a statement on Thursday, Lilly said a late-stage study found that its experimental GLP-1 pill allowed patients to shed an average of 12.4% pounds after 72 weeks. Of the more than 3,000 people who participated in the study, those who received a placebo drug lost 0.9%.

Lilly executives have touted the once-daily pill, known as orforglipron, as a cheaper alternative to recently-popular obesity injections like its Zepbound offering or Novo’s Wegovy. Both of the medications are currently the main powerhouses of the obesity drug market, which is anticipated to surge to $150 billion in value early in the next decade.

Analysts cited by Reuters said they had been expecting orforglipron to equal Wegovy’s 14.9% weight loss over 68 weeks, which was demonstrated in a 2021 trial. Others had even seen the drug surpassing Wegovy in this regard.

The results also come after a separate study in June from Novo Nordisk showed that the Danish firm’s experimental option CagriSema led to nearly 23% in weight loss in overweight or obese adults, and overweight patients with type 2 diabetes lost almost 16% of their weight.

In a note, analysts at Mizuho flagged that Lilly’s study also showed an almost 25% drop-out rate in patients using the highest dose of orforglipron. The placebo rate stood at 29.9%, which the analysts said could suggest that "there was something about the study that is odd/unique and will need to get some clarity here."

In the wake of the announcement, shares in Novo, which have been under pressure in recent days after the company issued a profit warning and flagged a senior leadership shake-up, rose. The stock’s Novo Nordisk (NYSE: NVO), in particular, advanced by more than 7%.

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