Shares of Eli Lilly & Co. (NYSE:LLY) and Novo Nordisk (NYSE:NVO) are down 3% and 4.2%, respectively, on Wednesday after Roche announced positive Phase 1 results of its oral GLP-1 receptor agonist CT-996 for the treatment of people with obesity.
The company said data showed that treatment with CT-996 in participants with obesity and without type 2 diabetes resulted in a "clinically meaningful placebo-adjusted mean weight loss of -6.1% within four weeks."
In addition, the safety and tolerability profile was consistent with other oral GLP-1 receptor agonists, with no unexpected safety signals observed.
"We are pleased to see the clinically meaningful weight loss in people treated with our oral GLP-1 therapy CT-996, which could eventually help patients address both chronic weight management and glycaemic control indications," said Levi Garraway, Roche's Chief Medical Officer and Head of Global Product Development. "Following our data for CT-388, this is the second positive readout in less than three months from our growing metabolic pipeline."
Reacting to the news, analysts at Truist said they remain buyers of LLY "given it's one of the two leaders with significant market with Zepbound share despite demand exceeding supply."
"While we acknowledge the obesity landscape is getting crowded, Roche's (ROG-SWX; NR) once-daily, oral pill looks positive so far based on 4-wk data announced this morning," they added. "However, it's still early days, and we need to see more data, durability and safety over time."
Meanwhile, analysts at Morgan Stanley said they expect phase 1 data for CT-966 and once weekly GLP-1/GIP CT-388 to be presented at EASD 9-13 September, as "part of an improving catalyst path."
On Roche, the investment bank said there is an improving catalyst path through the second half of 2024. "With FX headwinds and biosimilar/branded headwinds better understood, our Core EPS estimates are now broadly in line with consensus for 2024-28," they wrote. "Greater pipeline and strategic appreciation remain key to investor sentiment."