FDA Vows Crackdown on Unapproved Weight-Loss Drug Copies, Boosting Shares of Novo Nordisk and Eli Lilly

Shares of Denmark-based global pharmaceutical giant Novo-Nordisk A/S surged over 5% during early European trading on Friday. The stock recovered some of its steep losses from the previous two trading sessions after the U.S. Food and Drug Administration (FDA) pledged to address the large-scale marketing of unapproved weight-loss pill versions. In U.S. pre-market trading, the American depositary receipts of Novo-Nordisk A/S (NVO.US) rose more than 8% at one point. Eli Lilly (LLY.US) also gained nearly 4% after falling almost 8% the previous day. On Thursday, U.S. telehealth company Hims & Hers Health (HIMS.US) launched a significantly cheaper compounded generic version of Novo-Nordisk A/S's FDA-approved weight-loss drug Wegovy, priced at $49 for a tablet version. This move triggered a decline in the shares of the two leading weight-loss drug makers, Novo-Nordisk A/S and Eli Lilly. It is understood that FDA Commissioner Marty Makary stated on social media platform X: "The FDA will act swiftly against companies marketing illegal generic weight-loss drugs on a large scale, which claim their products are similar to FDA-approved weight-loss medications." He did not name any specific companies. He added: "The FDA cannot verify the quality, safety, or effectiveness of unapproved drugs." Following the FDA commissioner's post, shares of Hims & Hers Health plummeted in U.S. pre-market trading, falling over 7% at one point. Wegovy Pill, the world's first oral large-molecule drug known as oral semaglutide for weight loss, was launched in the U.S. earlier this year. Since its debut on January 5, it quickly became a star product in the local obesity market. Prescriptions surged from 3,071 in the first four days to over 18,000 in the week ending January 16, and further reached 26,109 in the week ending January 23, demonstrating a strong launch momentum. A reluctance towards needles and a preference for oral medication are common psychological tendencies among patients with chronic conditions, including obesity and diabetes. Treatment adherence is a crucial foundation for achieving therapeutic efficacy.