Eli Lilly Gains Edge Over Novo Nordisk In Weight Loss Drug Market – NBC 7 San Diego

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Hello! Novo Nordisk and Eli Lilly have so far dominated the growing market for weight loss and diabetes drugs.

But Eli Lilly may be gaining an advantage over its Danish rival in the race to capitalize on growing demand for these drugs, also known as GLP-1.

This became clear last week when both companies released their second-quarter earnings reports.

“Lilly is taking the lead in the metabolic duopoly,” BMO Capital Markets analyst Evan Seigerman said in a research note on Thursday.

Novo Nordisk on Aug. 7 cut its full-year profit forecast after it said quarterly sales of its weight-loss shot Wegovy fell far short of Wall Street expectations. The disappointing result came because of larger-than-expected price concessions for pharmacy benefit managers, who negotiate drug discounts with manufacturers on behalf of insurers, executives said on a conference call last week.

Revenue from its blockbuster diabetes drug Ozempic also missed estimates for the period. The company’s shares fell sharply.

Despite all this, Novo Nordisk slightly raised its sales growth forecast for the full year.

Eli Lilly’s quarterly report a day later was a different story, with the Indianapolis-based company’s weight-loss shot Zepbound and diabetes drug Mounjaro both smashing second-quarter expectations.

Eli Lilly raised its 2024 revenue forecast by $3 billion and raised its full-year profit forecast thanks to strong results from Zepbound and Mounjaro, as well as “greater clarity” on the expansion of those drugs.

Unlike Novo Nordisk, Eli Lilly benefited from higher U.S. prices for Mounjaro this quarter as use of savings card programs for the drug declined. Executives said they expect “stable pricing” for Mounjaro and Zepbound over the last two quarters of 2024.

Eli Lilly shares closed up more than 9% on Thursday.

Several analysts were particularly pleased with Eli Lilly’s positive manufacturing news. Demand for weight-loss and diabetes drugs is outstripping supply in the U.S., so companies that can get more product to patients quickly could gain an advantage in this space.

All doses of Mounjaro and Zepbound are now listed as available in the Food and Drug Administration’s drug shortage database. Meanwhile, some doses of Wegovy are in limited supply as Novo Nordisk invests billions in its own manufacturing expansion efforts.

In a research note on Thursday, Bank of America analysts raised their combined revenue forecast for Mounjaro and Zepbound to $19.7 billion in 2024, $31 billion in 2025 and $38.5 billion in 2026 as they “became more comfortable with supply dynamics.”

Analysts said there could continue to be periodic supply shortages of Mounjaro and Zepbound in the near future “as access improves and physicians become accustomed to the availability of supply.” However, they praised Eli Lilly’s progress in expanding its manufacturing footprint and supply.

For example, Eli Lilly CEO David Ricks said Thursday during an earnings conference call that the company has built six manufacturing plants, some of which are already in the startup phase, and hired thousands of workers to ramp up production. The company acquired another site earlier this year.

Eli Lilly expects that production of incretin drugs – also known as weight loss and diabetes drugs – in the second half of 2024 will be 50% higher than in the same period last year, he added.

Ricks said Eli Lilly’s ability to ramp up production of Zepbound and Mounjaro gives the company confidence it can compete with new entrants into the weight-loss and diabetes drug market that may not have the same capabilities.

“I don’t know if that’s a barrier, but it’s definitely work to be done: scaling production,” Ricks said.

“You’re talking about building things on a billion-dollar scale, which takes time, is technically difficult, and is very capital intensive,” he continued. “Of course, competitors are going to have to come in. But there’s a long way to go for all of these (other drugmakers), and the two leading companies have largely covered that ground.”

If you have any tips, suggestions, story ideas, or data, feel free to send them to Annika at [email protected].

The latest technologies in healthcare

Stryker acquires AI startup Care.ai

Medical technology company Stryker announced Monday that it has entered into an agreement to acquire Care.ai, marking yet another deal involving artificial intelligence in the healthcare sector.

Care.ai uses tools like AI-powered sensors to help doctors monitor patients and workflows in hospitals, nursing homes and assisted living facilities. The company raised $27 million from Crescent Cove Advisors in 2022.

Stryker offers medical and surgical equipment and a range of orthopedics and neurotechnology products. The company said technology like Care.ai is “increasingly important” as healthcare organizations grapple with challenges such as nurse shortages, burnout, administrative burden and workplace safety concerns, according to a statement Monday.

Terms of the deal were not disclosed. Stryker said the acquisition is subject to customary closing conditions.

Stryker shares remained mostly stable on Tuesday.

“Care.ai will help Stryker significantly accelerate its healthcare informatics and digital vision capabilities to provide customers with intelligent, connected, real-time decision-making tools that improve the lives of caregivers and their patients,” Andy Pierce, president of Stryker’s MedSurg and Neurotechnology group, said in the release.

The company added that the technology offered by Care.ai will “integrate seamlessly” with Stryker platforms and devices.

“Our commitment to simplifying and improving the lives of healthcare professionals and patients remains unwavering,” Chakri Toleti, founder and CEO of Care.ai, said in a LinkedIn post Monday. “Together, we are transforming healthcare by ensuring that we always prioritize the well-being of those who need care and those who dedicate themselves to caring for others.”

Stryker declined to comment. Care.ai did not immediately respond to CNBC’s request for comment.

Read the full announcement here.

If you have any tips, suggestions, article ideas, or data, you can send them to Ashley at [email protected].