Eli Lilly investors shouldn’t sweat rival Novo Nordisk having the first obesity pill on sale
Jim Cramer says don’t sweat Novo Nordisk’s head start over Club holding Eli Lilly in the obesity pill market. Eli Lilly stock slipped about half a percent this morning, while Novo Nordisk shares surged more than 8% after becoming the first to secure FDA approval for a GLP-1 weight-loss pill. “[Novo] got approval ahead of when we thought. People immediately freak out. They sold Lilly. Big mistake,” Jim said during Tuesday’s Morning Meeting. The move lower for Lilly shares is overblown because it’s just a matter of time before the company receives the OK from U.S. regulators for its own oral weight-loss drug, orforglipron. Additionally, orforglipron has advantages over Novo’s pill that could make it more appealing to patients. “I don’t like Novo. I like Lilly. Lilly’s coming back obviously because they have their own pill and it’ll be out in three months,” Jim added. Novo plans to launch once-daily oral Wegovy, known as “Wegovy-in-a-pill,” in the United States in early January. The Danish drugmaker said the starting dose of 1.5 milligrams will be available in pharmacies and through certain telehealth providers with savings offers for $149 per month. Novo expects the Wegovy pill to expand the size of the weight-loss drug market, Novo CEO Mike Doustdar said Tuesday in an interview on CNBC. “We also know from our own family members and circles of friends that there are many who still do not … take an injection either because they’re so much afraid of the needle or there’s a societal taboo that taking an injection makes you feel sick.” In addition to attracting new patients to GLP-1s, some patients may switch from injectables to the pill to help them maintain their weight loss in a convenient way, Doustdar said in a statement late Monday. LLY YTD mountain Eli Lilly (LLY) year-to-date performance Yes, the approval is a much-needed win for Novo. But being first out of the gate does not mean it will dominate Lilly in the long run. Consider: Novo Nordisk beat Lilly to the injectable GLP-1 market for weight loss with Wegovy in 2021. But that didn’t stop Lilly from eventually getting the leadership position in the lucrative space once its Zepbound treatment launched in late 2023 . Lilly is expected to generate roughly $17 billion in revenue from Zepbound sales in 2025, according to FactSet, compared with about $13 billion in revenue for injectable Wegovy. Crucially, Lilly’s orforglipron will have some perks to the Wegovy pill when it finally gets to market. Most notably, there’s no food and water restrictions with Lilly’s oral GLP-1. With the Wegovy pill, patients need to have an empty stomach then wait 30 minutes before eating, drinking or taking another oral medication. Both companies have indicated they have built up supply of their oral GLP-1s, in hopes of avoiding the shortages that once plagued their injectable counterparts. Overall, it’s been a killer year for Eli Lilly stock after a sluggish first half, and Tuesday’s news doesn’t change that. In November, Lilly became the first drugmaker to reach a $1 trillion market capitalization . The stock received a boost after President Trump announced deals with Lilly and Novo to slash prices of some of their obesity drugs in order to expand access to the costly treatments. Despite Tuesday’s muted performance, Lilly shares are still up 40% since the start of 2025. Shares of Novo, meanwhile, have declined roughly 40% this year. (Jim Cramer’s Charitable Trust is long LLY. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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