Eli Lilly, Novo Nordisk weight reduction drugs

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Good afternoon! Novo Nordisk and Eli Lilly have thus far dominated the booming marketplace for a category of weight reduction and diabetes drugs. 

But Eli Lilly could also be starting to realize an edge over its Danish competitor within the two-horse race to capitalize on the soaring demand for those treatments, also often called GLP-1s. 

That became clear last week after the pair reported their respective second-quarter earnings. 

“Lilly is pulling ahead within the metabolic duopoly,” BMO Capital Markets analyst Evan Seigerman said in a research note Thursday. 

On Aug. 7, Novo Nordisk trimmed its full-year profit outlook after reporting that quarterly sales of its weight reduction injection Wegovy got here in well below Wall Street’s expectations. The disappointing result got here attributable to higher-than-expected price concessions to pharmacy profit managers, which negotiate drug discounts with manufacturers on behalf of insurers, executives said on a conference call last week. 

Revenue from its blockbuster diabetes drug Ozempic also failed to fulfill estimates for the period. The corporate’s stock plunged. 

Still, Novo Nordisk barely increased its guidance for full-year sales growth. 

Eli Lilly’s quarterly report in the future later was a wholly different story. The Indianapolis-based company’s weight reduction injection Zepbound and diabetes treatment Mounjaro smashed expectations for the second quarter.

Eli Lilly hiked its 2024 revenue outlook by $3 billion and raised its full-year profit guidance on the strong performance of Zepbound and Mounjaro and “improved clarity” into the corporate’s production expansions for those drugs. 

Unlike Novo Nordisk, Eli Lilly benefited from higher U.S. prices of Mounjaro within the quarter as use of savings card programs for the drug decreased. Executives said they expect “stable pricing” for Mounjaro and Zepbound across the last two quarters of 2024. 

Eli Lilly shares closed greater than 9% higher on Thursday. 

Several analysts were particularly pleased with Eli Lilly’s positive manufacturing updates. Demand for weight reduction and diabetes drugs is outstripping supply within the U.S., so corporations that may quickly get more of a product to patients can gain an edge within the space.

All doses of Mounjaro and Zepbound at the moment are listed as available on the Food and Drug Administration’s drug shortage database. Meanwhile, some doses of Wegovy are in limited supply as Novo Nordisk pours billions into its own manufacturing expansion efforts. 

In a research note Thursday, Bank of America analysts raised their combined revenue forecast for Mounjaro and Zepbound to $19.7 billion in 2024, $31 billion in 2025 and $38.5 billion in 2026 because they’ve “gotten more comfortable with supply dynamics.” 

The analysts said there could still be intermittent supply shortages of Mounjaro and Zepbound within the near term “as access improves and physicians get more comfortable with the supply of supply.” But they applauded Eli Lilly’s progress towards beefing up its manufacturing footprint and provide. 

For instance, Eli Lilly CEO David Ricks said on an earnings call Thursday the corporate has built six manufacturing plants, a few of that are already ramping up, and hired hundreds of employees to extend production. The corporate acquired one other site earlier this yr.

Eli Lilly expects incretin drug production – one other term for weight reduction and diabetes treatments – within the second half of 2024 to be 50% higher than it was throughout the same period last yr, he added.  

Ricks said Eli Lilly’s ability to scale up manufacturing of Zepbound and Mounjaro makes the corporate confident it may possibly compete with newcomers to the load loss and diabetes drug market that won’t have the identical capability.

“I do not know if it is a barrier, however it definitely is figure to do: Scaling manufacturing,” Ricks said. 

“You are talking about making things on the billion scale, which takes time and is technically difficult and really capital-intensive,” he continued. “So, in fact, competitors could have to return. But there is a large road ahead for all these [other drugmakers] that the 2 leading corporations have already walked largely.”

Be happy to send any suggestions, suggestions, story ideas and data to Annika at annikakim.constantino@nbcuni.com.

Care.ai uses tools like AI-powered sensors to assist clinicians monitor patients and workflows across hospitals, expert nursing facilities and assisted living facilities. The corporate raised $27 million from Crescent Cove Advisors in 2022.

Stryker offers medical and surgical equipment and a spread of products in orthopedics and neurotechnology. The corporate said technology like Care.ai’s is of “increasing importance” as health-care organizations contend with challenges like nursing shortages, burnout, administrative burden and workplace safety concerns, in line with a release Monday. 

The terms of the deal weren’t disclosed, and Stryker said the acquisition is subject to customary closing conditions. 

Shares of Stryker were mostly flat on Tuesday. 

“Care.ai will help Stryker significantly speed up our healthcare IT and digital vision to offer customers with real-time, smart and connected decision-making tools that enhance the lives of caregivers and their patients,” Andy Pierce, group president of MedSurg and Neurotechnology at Stryker, said in the discharge.

The technology Care.ai offers will “integrate seamlessly” with Stryker’s platforms and devices, the corporate added. 

“Our commitment to simplifying and enhancing the lives of healthcare professionals and patients stays unwavering,” Chakri Toleti, founder and CEO of Care.ai said in a post on LinkedIn Monday. “Together, we’re transforming healthcare, ensuring that we all the time prioritize the well-being of those that need care and people who dedicate themselves to caring for others.”

Stryker declined to comment. Care.ai didn’t immediately reply to CNBC’s request for comment. 

Read the total announcement here.

Be happy to send any suggestions, suggestions, story ideas and data to Ashley at ashley.capoot@nbcuni.com.