Obesity pills from Eli Lilly, Novo Nordisk near US launch

Eli Lilly and Novo Nordisk are preparing to take their rivalry to the next frontier of weight-loss medications: pills.

Both companies expect to launch oral obesity drugs in the U.S. next year, once regulators approve them. Daily pills could introduce more people to GLP-1s, the class of medicine that’s best known for weekly shots.

But after Lilly’s pill produced less weight loss than analysts had expected in a recent late-stage trial, it raised new questions about how widely the oral drugs will be adopted and which rival company will dominate the space.

Doctors will get a closer look at how Lilly and Novo’s pills compare in the coming months when Lilly releases the results of a head-to-head trial of the two, Lilly’s Chief Scientific Officer Dan Skovronsky said in an exclusive interview with CNBC. The study’s main objective is to measure how much the pills can reduce blood sugar levels in people with Type 2 diabetes, but it will also gauge weight loss.

“We wouldn’t have undertaken this head-to-head phase three randomized control trial unless we had a lot of confidence that orforglipron would fare well in comparison to oral semaglutide,” Skovronsky said.

He cautioned against making comparisons across trials that didn’t directly compare the drugs, where Novo’s pill looks more effective and led to fewer discontinuations. Meanwhile, Novo’s Chief Scientific Officer Martin Holst Lange in a separate interview said the data speak for themselves.

Novo’s forthcoming obesity pill is an oral version of its weekly shot Wegovy; Lilly’s pill is a new drug called orforglipron that’s different from its shot Zepbound. Lilly’s shot is the gold standard in terms of efficacy, Skovronsky said. It can help people lose more than 20% of their body weight.

Neither Novo’s pill nor Lilly’s oral drug are as effective as Zepbound. At the highest dose, orforglipron has produced about 12% weight loss, while oral semaglutide has led to about 17%. That raises the question of how many people will opt for a pill if it means less weight loss.

Even so, Wall Street expects pills to make major inroads in the coming years. Analysts see oral drugs representing about 20% of the estimated $80 billion market for GLP-1 obesity drugs in 2030, according to data from Evaluate.

Skovronsky thinks that pills could eventually become the primary way that obesity is treated around the world, and that oral drugs could have a larger market share than injectables. He said most patients are more concerned about other factors like supply and convenience than how much weight they can lose, and he thinks orforglipron has the edge.

The treatment is a small molecule drug like most pills people know. It can be manufactured more easily than peptides, like the shots and Novo’s pill. And it doesn’t come with the food and water restrictions that come with Novo’s oral option, which requires people wait 30 minutes after taking the drug to eat and drink.

“When I look at the pills, orforglipron has no food effect, it’s a small molecule, so the manufacturing should be easier,” said BMO Capital Markets analyst Evan Seigerman. “But with new management at Novo Nordisk, I think [new Chief Executive Officer] Mike Doustdar is not going to just take this and be complacent about it. He’s going to lean in and ensure that this launch is successful.”

After seeing the results from Lilly’s obesity pill trial, Seigerman moved some of his market share estimate from orforglipron to oral semaglutide. Analysts cut their 2032 estimates for orforglipron by an average of about $4.5 billion between May and September, according to Evaluate. They now see sales of $14.56 billion that year.

Skovronsky said it’s harder to predict the market dynamics than the science.

“We did a good job predicting the science,” he said. “We said we’d make an oral that had safety, tolerability and efficacy that was similar to injectable GLP-1s. We did that. The science parts played out. Let’s see how the market plays out.”