Lilly set for strong quarter after Novo profit warning
Lilly's weight-loss drug Zepbound leads the U.S. market and has faced less competition from cheaper copies made by compounding pharmacies, giving it an edge, they said, after investors wiped $70 billion from Novo's market value.
Novo, which sells the obesity drug Wegovy and related diabetes medicine Ozempic, on Tuesday issued a profit warning, opens new tab, citing lower U.S. growth expectations and competition including from compounded versions.
"I think that this is a pretty positive report for Lilly just because it shows the competitive note it has against their largest competitor," said Dave Wagner, portfolio manager at Aptus Capital Advisors.
Analysts expect Lilly to post second-quarter earnings of $5.57 per share on revenue of $14.71 billion, according to LSEG data. They are also looking for a full-year profit of $21.83 per share.
Lilly has forecast adjusted earnings of $20.78 to $22.28 per share for 2025.
Still, Lilly's shares fell nearly 5% on Tuesday, reflecting concern that the company could be vulnerable if Novo cuts prices aggressively or if its growth in the obesity market also slows more than expected, analysts and investors said.
Zepbound holds just under 60% of the obesity market, while Lilly's diabetes drug Mounjaro - containing the same active ingredient - accounts for over half of its segment against Ozempic, according to IQVIA data shared with Reuters by an analyst. IQVIA did not immediately respond to a request for confirmation.
UBS analyst Trung Huynh said data also showed Lilly was getting around two-thirds of new patients onto Zepbound. The company in December posted results from a large head-to-head trial showing patients on Zepbound lost an average of 20.2% of their weight after 72 weeks compared to 13.7% for the group treated with Wegovy.
Lilly is also expected to be first to the market with the next generation of oral obesity drugs. Lilly has said it intends to seek approval for its experimental drug orforglipron by the end of the year.
Lilly has felt less heat from compounded versions of its medicines than Novo Nordisk, Huynh said, largely because Wegovy and Ozempic both hit the market before Lilly's drugs and built up patient recognition sooner.
Compounding pharmacies earlier this year were restricted under U.S. law from making drugs that were essentially copies of Wegovy and Zepbound, but can still make personalized doses for patients who need them, or formulations not offered by FDA-approved medicines.
Investors earlier this year were rattled by CVS Health's (CVS.N), opens new tab decision to drop Zepbound from some lists of medicines it covers for reimbursement starting on July 1, triggering a 10% share price plunge.
But Lilly's stock has declined marginally so far this year, compared to a more than 40% fall in Novo Nordisk's shares, including Tuesday's moves.
Barclays analyst Emily Field said Lilly could calm investors next week by reaffirming or boosting revenue and profit outlooks, or simply by delivering strong financial results.
Brian Mulberry at Zacks Investment Management said signs of softness in the obesity or diabetes drug market, especially from a peer like Novo, typically trigger broad-based selling, which might account for Lilly's share drop on Tuesday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Times
2 hours ago
- Times
How I cut out ‘food noise' and lost 40lbs
Over the past six years I've lost more than 40lb (almost three stone). It has been a long road to find 'peace' with food and my body, and at the age of 47 I have done it at long last. Healing a complicated relationship with food that involved years of binge eating and yo-yoing weight was difficult — but it is beginning to feel less of an achievement now that everyone else seems to be doing it with ease. Watching the pounds melt off people around me thanks to a relatively quick course of Mounjaro or Ozempic, I feel like someone who made careful investments and earned a modest amount of money just as others around me enjoy a lottery win. I've spent most of my life trying to manage my weight and now that I've finally done it, at a time when everyone seems to be getting teenier and teenier, it sometimes feels daft to have done it the 'hard way'. Perhaps it irks me because overcoming disordered eating and yo-yoing weight isn't something that just happens with an injection. It's a huge undertaking and for me it's a process that never really ends.
South Wales Guardian
3 hours ago
- South Wales Guardian
Heston Blumenthal warns weight loss drugs will be bad for food industry
Blumenthal, who has been awarded seven Michelin stars over the course of his career, said of the injections: 'You still enjoy food, but it stops appetite. 'So what's going to happen is people are going to want smaller portions. 'Supermarkets are going to be hit massively. I even heard in the news that airplanes are going to save lots of money because of the weight loss,' he told Times Radio. He said he believes the issue is 'going to get much worse in the next six months'. He also told host Jane Mulkerrins he is taking Wegovy to combat the effects of his bipolar medication. 'I've put on so much weight,' he said. He said Wegovy is helping him lose weight, describing it as a 'paradox' given he is a restaurateur. Blumenthal, who presented Channel 4 shows Heston's Fantastical Food and Heston's Feasts, was sectioned following a manic episode and given a diagnosis of bipolar disorder in November 2023. He has since spoken widely of learning to live with the condition, and was the subject of BBC documentary Heston: My Life With Bipolar, which was broadcast in June.
Daily Mail
4 hours ago
- Daily Mail
Heston Blumenthal reveals he's taking weight-loss drug Wegovy and shares fears that slimming jabs could pose a threat to the food industry
Heston Blumenthal has revealed he's taking the weight-loss drug Wegovy. The celebrity chef, 59, told how he's been taking the slimming aid to help combat the effects of his bipolar medication, having been diagnosed with type 1 bipolar in 2023. Heston also expressed his fears that the rise in popularity of weight loss jabs could pose a threat to the food industry. Speaking to Times Radio, Heston explained: 'I've put on so much weight, but it's starting to come off now', before adding that his use of the drug is a 'paradox' given the fact he's a restaurateur. The TV personality remarked how he'd lost 'eight kilos' on Wegovy so far, however, he has also dealt with side effects including brain fog, slurred speech and problems with balance. The drugs contain semaglutide, an amino acid, which suppresses appetite by mimicking a hormone telling the brain you are full up. In a new interview, the celebrity chef, 59, told how he's been taking the slimming aid to help combat the effects of his bipolar medication, having been diagnosed with type 1 bipolar back in 2023 [Boxes of Wegovy pictured] Heston issued a warning to the food industry, remarking how the continued use of the popular slimming jabs could have a detrimental affect on it. He explained: 'Wegovy, Ozempic, Mounjaro – you still enjoy food, but it stops appetite, so what's going to happen is people are going to want smaller portions.' Heston added that things were 'going to get much worse in the next six months' for restaurants, before expressing that supermarkets would also be affected. However, the food writer noted that he's 'formulating a plan' in a bid to help the food industry. Elsewhere, last month, Heston revealed he 'had thought about different ways of ending [his life]' before eventually receiving treatment for bipolar disorder. The London-born celebrity chef, who holds a total of seven Michelin stars across his restaurants, was diagnosed with type 1 bipolar after being sectioned - on the insistence of his wife, French entrepreneur Melanie Ceysson - in November 2023. Bipolar disorder is a brain disorder which causes unusual and often sudden changes in mood and energy levels. He spent two weeks heavily medicated in a psychiatric hospital and a further six weeks in a clinic, where he continued with intensive treatment and practised walking meditation. Yet, four years previously, he had already hit rock bottom and was contemplating the method he would use to take his own life. Looking back to filming the cookery show Crazy Delicious in 2019, Heston told The Times: 'I remember lying on the sofa the night before I was due to go to do the show - I didn't want to do it, because of the condition I was in - and I had thought about different ways of finishing [my life]. 'I went through a list: knife? No, can't do that. Gun? Don't have one. Rope? I don't think I could do that; wouldn't know how. It would probably slip off or whatever. 'And there was no train station anywhere near to jump in front of a train.' The father-of-four, whose first eatery, The Fat Duck, was named the best restaurant in the world in 2005, added that he didn't perceive that he was in a depressive state - even when he 'was talking about suicide or death'. He told the publication: 'I must have been in a mixed state [a period of rapid highs and lows], because I was excited about planning my funeral, planning my wake. What music I wanted, who I wanted there - I got quite excited about that.'
