Lilly Shares Rise 3% as Pipeline Data Widens Gap Over Novo Nordisk

Eli Lilly and Novo Nordisk both shared positive updates at the American Diabetes Association’s annual Scientific Sessions. However, only Lilly’s stock moved up, rising 3% on Monday, while Novo’s American depositary receipts dropped by a similar amount. This shows that Wall Street currently favors Lilly’s clinical pipeline over Novo’s recent prescription milestone. Below is a look at what each company announced and why analysts see a shift in sentiment.

Lilly shared data showing its Foundayo pill led to significant weight loss for women at all stages of menopause, based on results from about 1,500 women in the ATTAIN-1 and ATTAIN-2 Phase 3 trials. In addition, Lilly’s new obesity drug retatrutide helped with knee osteoarthritis pain and sleep apnea, along with notable weight loss in late-stage trials. Citi Research said Lilly’s incretin portfolio is made up of category-defining products, not just single blockbusters, and pointed to orforglipron and retatrutide as examples. The firm also mentioned eloralintide, a once-weekly injectable obesity drug in Phase 2, as a possible future blockbuster, noting that its tolerability and effectiveness may not be fully recognized by the market yet.

Novo said that U.S. prescriptions for its Wegovy obesity pill have passed 3 million since launching in January, which means about one new prescription every five seconds. This makes it one of the biggest pharmaceutical launches in U.S. history. However, Novo’s clinical updates at the ADA conference, including good results for its next-generation GLP-1 drug CagriSema, did not excite the market. Analysts still have concerns about the drug’s commercial prospects.

Last week, Goldman Sachs said Lilly is set to lead the GLP-1 market with both current and future treatments. One main advantage is that Foundayo, a small-molecule pill, is much easier to make in large quantities than Novo’s semaglutide. This gives Lilly a strong position to expand internationally, which may make it hard for Novo to compete.

Over the past year, Novo’s U.S.-listed shares have dropped more than 40%, while Lilly’s shares have risen by 51%. The difference in their stock performance on Monday suggests this gap could keep growing.