Why LLY and NVO's Weekly Decline Wipes Out a Month's Gains?
Due to the formidable rival— $Roche Holding Ltd(RHHBY)$ 's oral weight loss drug is coming!
On Thursday's closing, $Eli Lilly(LLY)$ declined by 6.26%. By the time of Friday's opening, Eli Lilly had declined by 10.49% for the week, erasing all the gains since June 7th.
In the meantime, $Novo-Nordisk A/S(NVO)$ fell over 4% on Thursday, with a weekly drop exceeding 8%, falling back to the price before May 10th.
I have been keeping an eye on weight loss drugs before, and my friend was bullishly believes that $Eli Lilly(LLY)$ can rise above $1,000.
1. Let me took a closer look at what happened?
It turned out that their competitor in the weight loss drug market, $Roche Holding Ltd(RHHBY)$ , recently announced that its experimental oral weight loss drug CT-996, in a Phase I trial, could reduce the average weight of obese patients with type II diabetes by 6.1% in 4 weeks, with the early trial results being optimistic.
On Wednesday, the Swiss pharmaceutical giant $Roche Holding Ltd(RHHBY)$ announced that the second weight loss drug candidate from its acquisition of Carmot Therapeutics showed positive effects in early trials. After the statement was released, Roche's stock price soared by more than 5% and later expanded to a 6% increase.
According to the introduction, Roche's experimental drug CT-996 is a small molecule GLP-1 receptor agonist that needs to be taken orally once a day. Compared to the "miracle weight loss drug" that requires injection, Roche's weight loss candidate only needs to be taken orally daily, making it more convenient.
Roche's Chief Medical Officer Levi Garraway said in a statement:
We are pleased with the significant weight loss effects shown by the oral GLP-1 therapy CT-996 in clinical trials, which may ultimately help patients address long-term weight management and blood sugar control issues.
However, Roche's CEO Teresa Graham said in an interview last December that oral obesity treatment drugs may take several years to be widely available on the market. Analysts said that Roche's oral weight loss drug will provide an alternative for obese patients who do not like injectable drugs.
2.The GLP-1 receptor agonist track adds another strong rival - $Roche Holdings (RHHBY)$
Weight loss company $Novo-Nordisk A/S(NVO)$ and $Eli Lilly(LLY)$ , which respectively produce Wegovy and Zepbound, are also the two most popular GLP-1 receptor agonist drugs in the current market, also known as "miracle weight loss drugs."
Refer to the several pieces of content I have organized before:
$Viking Therapeutics(VKTX)$ 's new weight loss drug has the same effect as $Eli Lilly (LLY)$'s Zepbound. Both mimic the activity of GLP-1 and GIP receptors. This can improve satiety and blood sugar indicators, and slow down gastric emptying.
However, $Novo-Nordisk A/S(NVO)$ 's Wegovy only studies GLP-1.
In February 2024, $Viking Therapeutics(VKTX)$ announced that VK2809 and VK2735 are two of the most competitive weight loss drug candidates. When the company announced the good news, the stock price soared by 121%.
Compared from the perspective of efficacy:
Patients who take the $Viking Therapeutics(VKTX)$ drug VK2735 once a week lost 14.7% of their weight in 13 weeks.
Higher than $Eli Lilly(LLY)$ 's Zepbound improved by 7% to 8% over the placebo in the Phase 3 study Surmount-1.
3. Indeed, the competition in a good track is also more intense.
In 2022, $Novo-Nordisk A/S(NVO)$ 's liraglutide (Victoza), semaglutide (subcutaneous injection + oral formulation), and $Eli Lilly(LLY)$ 's dulaglutide (Trulicity) had sales of $1.746 billion, $10.065 billion, and $7.44 billion respectively, all of which are blockbuster drugs.
If you add $AstraZeneca PLC(AZN)$ , $GlaxoSmithKline PLC(GSK)$ , $Sanofi SA(SNY)$ , $Pfizer(PFE)$ and other GLP-1 and GLP-1/GIP listed products, the global sales of GLP-1 drugs in 2022 exceeded $20 billion, while in 2018 it was only 8.353 billion yuan.
In 2023, the global weight loss supplement market size was $29.96 billion, and it is expected to grow at a compound annual growth rate of 13.70% from 2024 to 2030. Overseas investment banks raised the sales forecast for weight loss drugs last September, expecting the annual sales of GLP-1 agonist drugs to exceed $100 billion by 2030.
This week, $Roche Holding Ltd(RHHBY)$ released more good news, and $Eli Lilly(LLY)$ , $Novo-Nordisk A/S(NVO)$ , and $Viking Therapeutics(VKTX)$ all fell, including the Danish biotechnology company $Zealand Pharma A/S(ZEAL)$ , which is developing its own obesity treatment drugs, and its stock price also fell by more than 5%.
Currently, $Roche Holding Ltd(RHHBY)$ 's market value is second only to $Eli Lilly(LLY)$ and $Novo-Nordisk A/S(NVO)$ , higher than $AstraZeneca PLC(AZN)$ , $Pfizer(PFE)$ , $Sanofi SA(SNY)$ , $GlaxoSmithKline PLC(GSK)$ , and $Viking Therapeutics(VKTX)$ .
Regarding future stock price trends, according to the report from https://www.grandviewresearch.com/:
According to the type, the weight loss supplement market is divided into liquid, powder, soft capsules, pills, and others. The powder segment dominated the entire market in 2023, with the largest revenue share of 38.07%.
It is expected that from 2024 to 2030, the pill segment market will grow at the fastest compound annual growth rate. This growth is driven by people's increasing preference for pill-form weight loss supplements, which come in various forms such as chewable tablets, sustained-release tablets, and sublingual tablets.
I believe that Roche's oral medication will also boost this subfield after it is launched in the next few years.
I will continue to pay attention to this field.
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Can’t wait for Mon, next week is a shorts bbq week, when S&P recovers, close them shorts while you can, you have been warned.
both LLY and Novo coming roaring back today, both have first mover advantage all over the world by at least 5 years over any competitor, onwards and upwards.