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Investing.com - Shares in Eli Lilly (NYSE:LLY) sank by over 11% in early U.S. trading on Thursday after a study showed that the pharmaceutical giant’s weight-loss pill cut body weight by less than a rival treatment from Novo Nordisk (NYSE:NVO).
In a statement on Thursday, Lilly said a late-stage study found that its experimental GLP-1 pill allowed patients to shed an average of 12.4% pounds after 72 weeks. Of the more than 3,000 people who participated in the study, those who received a placebo drug lost 0.9%.
Lilly executives have touted the once-daily pill, known as orforglipron, as a cheaper alternative to recently-popular obesity injections like its Zepbound offering or Novo’s Wegovy. Both of the medications are currently the main powerhouses of the obesity drug market, which is anticipated to surge to $150 billion in value early in the next decade.
Analysts cited by Reuters said they had been expecting orforglipron to equal Wegovy’s 14.9% weight loss over 68 weeks, which was demonstrated in a 2021 trial. Others had even seen the drug surpassing Wegovy in this regard.
The results also come after a separate study in June from Novo Nordisk showed that the Danish firm’s experimental option CagriSema led to nearly 23% in weight loss in overweight or obese adults, and overweight patients with type 2 diabetes lost almost 16% of their weight.
In a note, analysts at Mizuho (NYSE:MFG) flagged that Lilly’s study also showed an almost 25% drop-out rate in patients using the highest dose of orforglipron. The placebo rate stood at 29.9%, which the analysts said could suggest that "there was something about the study that is odd/unique and will ned to get some clarity here."
"To have this many patients drop out across arms is surprising and almost does not compute," the analysts said. "Ideally [we] want to see a more well tolerated drug."
Lilly’s announcement overshadowed otherwise solid second-quarter earnings from the company. Revenue jumped by 38% versus a year earlier to $15.56 billion, with Zepbound sales in particular surging by more than anticipated to $3.38 billion.
Bloomberg consensus estimates had called for group-wide revenue of $14.7 billion.
Adjusted earnings per share, meanwhile, rose to $6.31, up from $3.92 in the corresponding period last year.
With the returns in mind, Lilly lifted the midpoint of its 2025 full-year guidance by $1.5 billion to a range of $60 billion to $62 billion. Its outlook for adjusted per-share income was also lifted to $21.75 to $23.
CEO David Ricks said Lilly had been boosted by "sustained momentum" across its key medicines. "Our pipeline continued to advance, highlighted by positive study results in oncology and cardiometabolic health," Ricks added.
(Reuters contributed reporting.)