Novo Nordisk (NYSE:NVO) shares jumped over 11% in premarket trading on Thursday following disappointing data on Eli Lilly’s oral obesity drug orforglipron, which raised concerns over its efficacy and tolerability.
Wolfe Research described the 11.5% placebo-adjusted weight loss at 72 weeks as “modestly below investor expectations of 13–15%.” While analysts acknowledged the study cleared a key hurdle, they also noted that both “weight loss and tolerability came in light.”
The highest dose of orforglipron saw treatment discontinuation rates of 24.4%, with even the lower doses experiencing dropout rates in the mid-teens. Wolfe highlighted, “We’d flag the 10.3% and 24.4% treatment discontinuation rates… We look to results at EASD, Sept. 17th, to further gauge prescriber sentiment,” while maintaining an Outperform rating on Lilly.
Mizuho analysts shared concerns about tolerability, calling the results “clearly not the ideal outcome here despite [a] good quarter.” They pointed to the “near 25% patient drop-out rate on the highest dose” and questioned the “unusually high 29% placebo discontinuation rate” as “almost does not compute.”
Despite the setback, Mizuho still sees long-term potential for orforglipron: “11.2% weight-loss for a pill we think is solid given ease of use… maybe more of a consumer product than a drug.”
In the near term, the results seemed to favor Novo Nordisk, with Mizuho noting “NVO rallying… as investors believe gap between the two has now narrowed to some extent.”
Meanwhile, Lilly shares dropped more than 7% in premarket trading despite a strong quarter that included $3.38 billion in Zepbound sales and an upward revision of its full-year guidance.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.