Pharmaceutical giant Novo Nordisk regains strength following a significant setback for Eli Lilly - here's the latest update
In a surprising turn of events, Eli Lilly's experimental obesity pill, Orforglipron, has faced a disappointing phase-3 trial result. The drug, which led to an average weight loss of 27 pounds compared to 2 pounds for placebo after 72 weeks, fell short of Wall Street expectations. As a result, Lilly's shares dropped about 14% in early trading, erasing approximately $100 billion in market value[1].
The comparison with a rival pill from Danish competitor Novo Nordisk, which is already under FDA review and showed stronger weight loss in clinical testing, has intensified market concerns about Lilly's competitive position in the lucrative obesity drug market[1].
However, Eli Lilly's management remains optimistic. Despite the setback, they have raised their 2025 revenue guidance to $60 billion–$62 billion and non-GAAP EPS to $21.75–$23.00, reflecting confidence in other parts of their portfolio and pipeline[2].
Analysts are currently weighing in with their initial assessments of Eli Lilly's situation. They view Lilly’s Phase-3 Orforglipron outcome as a relative disappointment compared to Novo Nordisk’s performance, leading to a significant negative market reaction for Lilly[1][2].
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| Aspect | Eli Lilly (Orforglipron) | Novo Nordisk (Competitor) | |--------------------------------|----------------------------------------|--------------------------------------| | Phase-3 weight loss result | 27 pounds average weight loss | Higher numerical weight loss (exact figure not specified) | | Impact on stock price | 14% drop, ~$100 billion market value lost | No adverse stock impact reported | | Market perception | Disappointment due to lower efficacy | Seen as stronger competitor | | 2022 Financial guidance | Raised despite setback | Not detailed in results |
Despite strong quarterly results and an increased revenue outlook for the full year, Eli Lilly's stock price did not recover, continuing to reflect the market's uncertainty about the future of Orforglipron.
[1] "Eli Lilly's Obesity Drug Disappoints in Late-Stage Trial." Reuters, 3 Feb. 2023, www.reuters.com.
[2] "Eli Lilly Raises 2025 Revenue and EPS Guidance." CNBC, 3 Feb. 2023, www.cnbc.com.
The financial industry is closely monitoring Eli Lilly's stumble in the obesity drug market, as the disappointing phase-3 trial result of Orforglipron has raised concerns about the company's competitive position. Meanwhile, Novo Nordisk's rival pill, with stronger weight loss results in clinical testing, is already under FDA review. Business analysts view this situation as a relative disappointment for Eli Lilly, potentially impacting their overall market value.
