ICYMI: Eli Lilly's New Weight Loss Pill

Shares in Eli Lilly surged on Friday  after its experimental pill helped patients shed weight and control blood sugar about as well as Ozempic, an advance that could turbocharge what’s already one of the fastest growing markets in medicine. Shares of the drug’s originator Chugai Pharmaceutical Co. also soared. 

The triumph of Ozempic, the blockbuster diabetes shot from Novo Nordisk A/S, and related drugs including Zepbound and Mounjaro from Lilly, has set off an all-out push to develop a pill that’s easier to take and less expensive to make. While rivals including Pfizer Inc. have suffered setbacks, analysts said success is critical to creating the $130 billion market they predict by the end of the decade. 

Hosts Carol Massar and Tim Stenovec speak with Bloomberg's Damian Garde about the new pill could mean for Eli Lilly. 

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg BusinessWeek
with Carol Masser and Tim Steneveek on Bloomberg Radio.

Speaker 2 (00:14):
We are talking about Eli Lilly, this stock surging after
data showed its experimental weight loss pill worked as well
as the ozempic shot, bringing it one step closer for
developing a needle free alternative. So let's get the details
from Bloomberg News healthcare reporter Damian guard he's here in Gardier.
Who's here in studio, Damien? Good to have you here.

(00:35):
Often running shares of Eli Lilly. I think it's the
top gainer in the s and P five hundred up
something like sixteen percent right now.

Speaker 3 (00:41):
Which is a massive gain. I mean, just to note
this is already a very expensive stock. Lily has flirted
with becoming the first one trillion dollar drug company in marketcap,
which I don't think they're there yet, basically based on
the theory that they can corner the market by consistently
kind of out innovating themselves in the race for these

(01:01):
hot obesity medicines that everybody talks about. So to the
news today, they had pivotal data from a late stage
study showing that their pill and oral treatment looks like
it works about as well as the injectable ozembic made
by its rival Novo Nordisk, at least in patients who
have type two diabetes. And this was closely watched because
despite it being a relatively smaller study and it being

(01:22):
diabetes and not obesity, everybody is looking at the read
through of what is the weight loss them And if
this is a pill that you take once a day, hallelujah,
they can do what a weekly injection can do. That
is again like a holy grail product in this market.

Speaker 4 (01:36):
A couple things you said, it's not yet a trillion
dollar company they want to be. It's eight hundred and
eleven billion dollars. That's acap right now. Today's move higher,
whopping sixteen percent a pill versus an injection, And look,
I don't like needles. A lot of people don't like needles.
Paul Sweeney was on earlier today talking on Bloomberg Intelligence,
talking about surveillance. He says he's administered this shot. He

(01:57):
says it's no big deal. His question was more about
what about side effects here? That seems to be more
of a barrier, at least in his experience.

Speaker 3 (02:06):
That's true so for people who can get over the
needle aspect, which is definitely true for people who have
type two diabetes, and we're finding out based on the
demand for these medicines that it's true for people who
want to lose weight as well. The side effect issue
is all gastro intestinal, or at least those are the
most common and the most That's what yes vexing for people.
So looking and again this is something scientists say never
to do. And dude, anyway, a cross trial comparison, which

(02:29):
is looking at Lily's data and comparing it to what
we saw with those empics published data, I would say
they're relatively comparable. The rates of you're talking about vomiting, diarrhea,
I apologize, so maybe this is not the toat we
usually shoot for on this show, and nausea. In some
cases they were a little higher with Lily's pill. In
some cases they were higher with the injections. But I
think the reaction right now is that they look pretty similar.

(02:52):
But I guess that could end up being the barrier
in the future if and when this product's approved and
we kind of remove the needle aspect, it's are you
comfortable being one of the ten to fifteen percent of
people who experience those side effects.

Speaker 2 (03:05):
Because I do I know of people who've like moved
around because they have really bad side effects from certain drugs.
They're not necessarily apples to apples. There's there's some variances.
I mean, Novo's down about seven percent. Should Novo be worried.

Speaker 3 (03:19):
Yes, I mean there's an argument that so Lily and
Novo have been the two giants of this market, Novo
being based in Denmark, Lily being based in Indiana, and
they've both been focused on diabetes for I mean, in
Lily's case, more than one hundred years, dating back to
like the initial synthesis of insulin, and so they've been
fighting one another in this place for basically the entirety
of their corporate histories. These data today and Lily's trajectory.

(03:43):
Maybe this is unfair, but it feels like they have
kind of out gamed Novo in this market. Nova has,
you know, the major product in the form of ozempic,
but Lily has an injectable medicine that works a little
bit better than ozempic and now appears to be knocking
on the door of having a pill.

Speaker 4 (03:59):
What's the next you know, when we think about pipelines,
this stuff takes years. That's why the startup biotech companies
are so volatile. If we're thinking about the pipeline, a
pill is sort of the next iteration, that's the golden goose,
That's what people are going for. What's next after that?

Speaker 3 (04:14):
So it's interesting because everybody has kind of differentiated You just.

Speaker 2 (04:18):
Breathe in, you spray something and just really no, I'm
just kidding, that's a mist would not be so bad.

Speaker 3 (04:25):
Not impossible, I think scientifically as well. But barring the
you know, aerosolization of GLP one kids, I don't think
we're there yet. Okay, So both Lily and Novo and
a few other companies including Astrozenca are kind of moving
in parallel tracks where there is the move to develop
oral medicines that might lead to a little less weight

(04:45):
loss but would be more accessible and were able to
produce and cheap to produce. And then there's a next
generation of injectables that appear to, at least so far,
have even stronger effects on body weight, So twenty to
twenty five percent body weight loss versus the smaller numbers
we see and the theory is that by let's say
the end of the decade, if all these things work,
it would be kind of like an armamentarium for people

(05:07):
looking for treatments. For people who have obesity such that
losing twenty five percent of their body weight is medically
necessary for their health, you would have the kind of
like big guns. This is all a little crude, but
the more efficacious injectable treatments. And then for people for
whom a smaller percentage body weight treatment is more desirable,
or who perhaps just need to maintain loss that they

(05:28):
got from one of those drugs, you would have the pills.

Speaker 2 (05:31):
So kind of a menu of drugs. Right. Essentially, Hey, Eli,
Lily is the top gainer in the s and P
five hundred. United Health is the top decliner. I just
we've got you got to ask. Stocks down like twenty
three percent. Here they cut its annual forecast and reported
its first earnings missing over a decade. What do we
need to know about this? Is this also an industry
wide problem because it dragged down the group Today.

Speaker 3 (05:53):
It does seem like it. The word ominous has been
invoked a few times now. United Health is difficult to
crosscut because they are this like octopus of healthcare. They
do everything, sort of developed their own medicines, but in
terms of insurance managed care, they are a you know,
arguably kind of monoymous. Yeah, and so, but in that
sense they are perceived as a bellweather. So they report earnings,

(06:16):
they have this unforeseen issue with their profitability relating to
Medicare advantage or sort of a supplementary insurance program. And
I think part of the ominous nature of that is
the thing they're suffering from is from basically a government
crackdown on how Medicare advantage works that began last year.
And you might think that that would alleviate under a
new administration, but doctor oz memet Oz, who is stepping

(06:39):
into the role of leading the federal agency that runs Medicare,
was very fiery in his Senate confirmation hearing about exactly
this issue. And so I think some of the stock
reaction is not just the shock of, as you mentioned,
the superlative of United missing earnings for the first time
in a decade, but also that like the storm clouds
seem to just still be on the horizon.

Speaker 2 (06:57):
Yeah, storm clouds over another industry is what a kind
of feels like what.

Speaker 4 (07:01):
He can talk about anything. Damian Guardia can talk about anything.
It's like he's been writing about Lily all day and
you throw him the United Health question and he knocks
it out of the park.

Speaker 2 (07:09):
Thank you so much.

Speaker 3 (07:10):
Time we can talk about doctor Oz.

Speaker 4 (07:12):
Thanks for joining us.

Speaker 2 (07:13):
Blimberg News healthcare reporter Damian Guardi