Eli Lilly’s obesity drug beats rivals in head-to-head trial — where Cramer expects stock price to go next

New trial data solidifies Club’s lead over Eli Lilly and Company in the hotly contested obesity drug race. Eli Lilly and Co’s obesity drug Zepbound beat its main rival Wegovy, made by Denmark’s Novo Nordisk, in the first head-to-head trial comparing the fast-growing weight loss drug. Eli Lilly said in a news release Wednesday that patients taking Zepound lost an average of 20.2% of their weight after taking the drug for 72 weeks, while those taking Wegovy lost 13.7%. Additionally, nearly 32% of people using Zepbound lost at least a quarter of their body weight, while those using Wegovy lost 16%, according to the Indianapolis-based drugmaker. Shares of long-term portfolio name Eli Lilly rose more than 2.5% Wednesday to about $833 a share. Novo Nordisk shares rose about half a percent. The Big Picture Zepbound and Wegovy belong to the booming class of obesity drugs known as GLP-1, which some Wall Street figures predict will be worth at least $100 billion by the end of the decade. Originally developed to treat type 2 diabetes, their weight-loss benefits have captivated the public and Wall Street in recent years, sending shares of Eli Lilly and Novo Nordisk to extraordinary heights. Eli Lilly and Company, in particular, rode the GLP-1 wave to become the world’s most valuable healthcare company, with a market value of nearly US$800 billion. These drugs mimic the naturally occurring GLP-1 hormone, which helps regulate blood sugar and suppress appetite, leading to weight loss. Zepbound’s active ingredient, tzepatide, also targets a second hormone known by the abbreviation GIP, which is believed to have an efficacy advantage over Wegovy. Both drugs are given as weekly injections. In fact, the results Eli Lilly released Wednesday weren’t necessarily surprising, given the existing data from a series of clinical trials that looked at the two drugs separately. But given the caveats to keep in mind when comparing independent trial results, it would be valuable to formally look at how Zepbound and Wegovy perform head-to-head. The results of the peer review will be announced next year. “We expect the HTH (head-to-head) clinical trial results to help drive Zepbound’s market share acceleration relative to Wegovy,” Leerink analysts wrote in a note to clients on Wednesday. Analysts added that they wanted to see if this How well the two drugs were tolerated — that was not included in Eli Lilly’s press release. Novo Nordisk was first to market, and Wegovy won approval from the U.S. Food and Drug Administration in 2021 to treat obesity. Ingredients, approved in 2017 for the treatment of type 2 diabetes. The FDA approved Zepbound in November 2023. Eli Lilly and Company’s Mounjaro, which contains tilsiparatide as the active ingredient, received approval in May 2022 to treat type 2 diabetes. There is a fierce competition to find suitable drugs. Novo and Eli Lilly are aggressively defending their turf, investing billions of dollars to build the manufacturing capacity needed to meet current demand while advancing clinical trials of next-generation treatments. Investors expect Novo’s next-generation CagriSema will receive a major update before the end of the year and is expected to achieve more than 25% weight loss in late-stage trials. The drug combines a compound called caglitide with semaglutide. The lead product in Eli Lilly’s pipeline is retarglutide, which produced an average of 24% weight loss in a 48-week interim study released last summer. Phase 3 trials are ongoing. Bottom Line We feel better about last week’s decision to increase Eli Lilly’s position – and shortly thereafter we got the very important news that the Biden administration has proposed reforms that would expand GLP-1 coverage to millions of U.S. People’s health insurance and Medicaid are currently unavailable. Now our trial results show that, as we’ve long suspected, Zepbound outperforms Wegovy. Eli Lilly’s stock sold off last month on concerns that President-elect Donald Trump would nominate pharmaceutical industry critic Robert F. Kennedy Jr. to be the nation’s top health official. However, the stock is now up more than 14% since closing at about $727 per share on November 18. Eli Lilly’s LLY Peak Year-To-Date “I think (Eli Lilly stock) should get back to the $900 level,” Jim Cramer said during a morning conference call Wednesday. “I think the only limiting factor is… does (Eli Lilly CEO) Dave Ricks have the ability to meet the demand? That’s the real question.” Since going public, both Zepbound and Mounjaro have It has been on the FDA’s drug shortage list for quite some time. However, as of Wednesday, the FDA said the shortage had been resolved. Eli Lilly executives said during the company’s earnings call in late October that the drug’s production capacity will be further expanded by 2025. View the full stock list at . Jim waits 45 minutes after sending a trade alert before buying or selling stocks in his charitable trust portfolio. If Jim talked about a stock on CNBC TV, he would wait 72 hours after issuing a trade alert before executing the trade. The investment club information above is subject to our Terms and Conditions and Privacy Policy and our Disclaimer. No fiduciary duty or obligation is created or created by any information you receive in connection with the Investment Club. No specific results or profits are guaranteed.

A sign bearing the company’s logo stands outside Eli Lilly’s headquarters campus in Indianapolis, Indiana, on March 17, 2024.

Scott Olson | Getty Images

New trial data solidifies club’s holding Eli Lilly and CompanyTaking the lead in the fiercely competitive obesity drug race.