Eli Lilly’s new obesity treatment, which features the active ingredient orforglipron, has emerged as a significant competitor to Novo Nordisk’s oral Wegovy. Days before the parade, recent trial data showed that Eli Lilly’s much-anticipated oral pill would achieve over 12% weight loss in participants. Anxiety about potential side effects has set in. Most strikingly, about 10.3% of patients on the highest dosage of 36 milligrams stopped treatment due to negative side effects. In comparison, just 2.6% of people on a placebo had such discontinuations.
When accounting for all patients—including those who weren’t compliant or adherent to treatment—the trials demonstrated a minimal impact on increased weight loss. The cumulative mean maximum weight loss was 11.2%. This mismatch has left some investors and analysts questioning whether the pill is really performing that well. Even so, no love for diabetes stocks despite these dismal results, Eli Lilly’s stock has started to rebound after the announcement of these trial results.
Jared Holz, a health care equity strategist at Mizuho, noted that Eli Lilly’s pill beats the pants off of Viking’s obesity treatment in every conceivable metric. It’s tops on just about every measure! He underscored the significance of this finding within the broader competitive market landscape.
“A much longer trial and therefore [Lilly] looks far better head-to-head,” – Jared Holz
Although Eli Lilly’s pill shows great promise as a tool for weight loss, it certainly is not without its drawbacks. In these trials, nausea was reported by 33.7% of participants and vomiting by 24% of participants—mostly at the increased dosage. Leerink’s analyst Risinger is particularly focused on the persistence of these GI events as more complete data emerges.
Previously, Bank of America analysts have been bullish on orforglipron’s possible market future. This is all particularly important because Eli Lilly has been pretty clear that their pricing strategy will be make or break. Their goal is to price orforglipron around the healthcare savings and health benefits from managing comorbidities that this treatment is able to provide.
Eli Lilly’s Ricks confirmed this approach when discussing the pricing strategy:
“Pricing will be based on the value orforglipron brings.”
Goldman Sachs analysts just projected the pill will be priced similarly to Eli Lilly’s tirzepatide. That’s a sign of a robust, well-thought out, competitive strategy to get into the market!
Dr. Mihail “Misha” Zilbermint explained how various pricing strategies can affect competition among markets. He reiterated that price will be the primary consideration in finding the winning firm.
“When it comes to which company is going to win the game — cost is the biggest issue,” – Dr. Mihail “Misha” Zilbermint
Experts still think Eli Lilly’s and Novo Nordisk’s drugs have potential to reshuffle the deck of obesity treatment. They recognize hesitance about adverse effects, but the possible rewards might be profound. According to Dr. Zilbermint, this could be a game-changer for many patients for both medications.
“I think both of the drugs are going to be gamechangers,” – Dr. Mihail “Misha” Zilbermint
As our colleague Evan Seigerman recently wrote, a 12% weight loss isn’t really a high bar to set. For the majority of patients, it still can carry a lot of weight.
“For many patients, 12% is a really great number,” – Evan Seigerman
He pointed out practical considerations that patients might face with the new treatments:
“If you’re a parent with kids and you have to take this drug and wait half an hour before you can drink your coffee, you’re going to drive yourself crazy, especially if you have to take this every day,” – Evan Seigerman
Eli Lilly, meanwhile, is rolling orforglipron to market. Now, we’ll be looking for them to perform well in the real world, taking on challenges and competing against entrenched incumbents such as Novo Nordisk. The future landscape of these obesity treatments will depend on pricing strategies and clinical outcomes when more data is available.