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Technology
ALLISON GATLIN

Eli Lilly's 'Surprising Development' In Obesity Just Slammed Novo Stock

Eli Lilly said Tuesday it will soon ask global regulators to approve its weight-loss pill, orforglipron, following a third successful Phase 3 study in patients with type 2 diabetes and obesity.

After 72 weeks, patients on the highest dose lost up to 10.5% of their body weight, compared to a 2.2% loss for the placebo group. That translated to 22.9 pounds and 5.1 pounds, respectively. Lilly noted patients with type 2 diabetes often have a difficult time losing weight.

Further, the highest dose led to a 1.8% reduction in A1C, a measure of blood sugar over time.

William Blair analyst Andy Hsieh called the results "another surprising development." In early August, Lilly stock tumbled more than 14% after orforglipron underperformed expectations in patients with obesity but not type 2 diabetes. The diabetic population is more difficult to treat, he said in a note.

"Accounting for three Phase III studies of orforglipron, we believe the franchise exhibited the highest competitive advantage in diabetes (roughly 15% of the U.S. adult population)," he said. "Furthermore, people living with type 2 diabetes often have comorbidities (such as hypertension or dyslipidemia), which are most commonly managed with oral medications."

Eli Lilly stock rose 5.9%, closing at 736.03, while Viking shares reversed early losses and climbed 0.7% to 26.04. Novo Nordisk, which has already asked the Food and Drug Administration to approve its weight-loss pill, saw shares slide 1.8% to 55.31.

Lilly Is Taking On Novo And Viking

Louis Aronne, chair emeritus of the American Board of Obesity Medicine, says the results are in line with injectable GLP-1 drugs.

"Orforglipron could help health care providers expand treatment options for patients who prefer oral therapies without compromising clinical results," he said in a statement.

That likely refers to Viking Therapeutics which, earlier this month said patients lost up to 12.2% of their body weight over 13 weeks while taking its pill. That compared to a 1.3% loss for the placebo group. But a high number of patients discontinued treatment due to side effects.

In Lilly's most recent study, the most common side effects were gastrointestinal-related and mild to moderate in severity, the company said in a news release. Between 6.1% to 10.6% of patients dropped out of the study due to side effects — depending on the dosage — vs. 4.6% of placebo recipients.

Eli Lilly says it will ask regulators to approve orforglipron this year. That puts Lilly narrowly behind Novo. The FDA is due to make an approval decision on its oral semaglutide, the chemical backbone behind injectables Wegovy and Ozempic, in the fourth quarter.

BofA Securities analyst Tim Anderson expects Lilly to launch orforglipron in 2026. He notes there are four more Phase 3 orforglipron studies expected to read out across 2025 and 2026.

Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.

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