Lilly Shares Plunge After GLP-1 Pill Weight Loss Lags Behind Competitor

Eli Lilly's experimental GLP-1 pill, touted for weight-loss benefits, led to substantial market reactions on Thursday. A late-stage study revealed the pill aided a 12.4% weight reduction in patients, lagging behind Novo Nordisk's Wegovy injectable in previous trials. This result precipitated a nearly 15% dive in Lilly's share value, marking its steepest single-day drop in 25 years and threatening to erase over $100 billion in market value. Despite the setback, sector analysts remain optimistic about Lilly's potential to expand its influence in the weight-loss arena.

Dave Wagner, Aptus Capital Advisors' portfolio manager, suggested the market's response was an overreaction. He maintains confidence in Lilly's ability to carve a significant market share. Concurrently, Lilly's results underwhelming compared to Wegovy's have buoyed Novo's shares by over 6%. CEO David Ricks expressed continued confidence in the GLP-1 medicine's value, emphasizing its once-daily oral administration's convenience as a significant advantage for broad-scale intervention in obesity management.

Looking forward, Lilly plans to set orforglipron's pricing considering economic value and healthcare system impact while offering consumer pricing options amid insurance coverage disparities. Analysts predict the drug could generate sales up to $40 billion by 2033. While patient preference sways towards oral medication for convenience, Lilly highlights this approach as a viable alternative to injection-based treatments, promising a strategic edge in early intervention and chronic disease management solutions.

(With inputs from agencies.)