Mackenzie Tatananni and George Glover

Eli Lilly said its new weight-loss pill had cleared a late-stage clinical trial, a promising sign as the company continues to face off with Ozempic maker Novo Nordisk.

Eli Lilly said in a news release that its orforglipron pill had passed a Phase 3 trial with "statistically significant efficacy results" and a safety profile consistent with injectable obesity drugs that already are on the market.

Orforglipron is a GLP-1 receptor agonist that works similarly to medications like Novo's Ozempic. The pill mimics the effects of the hormone glucagon-like peptide-1, which plays a role in regulating appetite and blood sugar levels.

Data collected during the trial showed that orforglipron was as safe to use as injectable GLP-1 medicines currently on the market. Patients on the highest dose lost an average of 16 pounds, or 7.9% of their weight, after 40 weeks, better than the range of 4% to 7% Lilly had indicated.

However, Lilly did lag behind competitors in one area. The pill helped lower hemoglobin A1c by an average of 1.3% to 1.6% from a starting level of 8% across different doses. Patients who took a placebo saw a 0.1% reduction in blood sugar levels. By comparison, hemoglobin A1c was lowered by closer to 2% in people who took Novo's Ozempic.

Nevertheless, Eli Lilly shares surged 16% to $853.42 on Thursday while the S&P 500 rose 0.8%. The stock was on pace for the largest daily percentage increase since June 29, 2000, when it gained nearly 18%, according to Dow Jones Market Data.

As the stock climbed, U.S.-listed shares of Novo Nordisk, Lilly's most formidable rival in the weight-loss market, declined 6.8%. Viking Therapeutics, a mid-cap biotech developing its own obesity drug, was up 0.4% after falling sharply in premarket trading.

Investors have been tracking four main parameters within the study: weight loss, blood sugar control, tolerability, and safety. All four showed solid results, BofA Securities analysts said Thursday.

"Arguably one of the biggest, most important, most closely watched pipeline events in large cap biopharma has just played out. And it was favorable," the analysts wrote.

While 8% of patients discontinued treatment at the highest dose due to side effects such as nausea and vomiting, no safety issues were observed, especially with regard to liver injury. In the firm's view, this is "pretty much a best-case scenario."

Orforglipron is more than just a tool for weight management. It's intended for use in diabetes patients as well. Lilly stressed that approval of the drug would advance the company's mission to reduce chronic diseases.

As an oral treatment, the pill differs from the GLP-1 injectables that are now on the market. Orforglipron is also a so-called small molecule drug that is easier to produce than an injectable medicine, giving Lilly an edge over competitors like Novo.

BofA Securities noted that both companies have run into manufacturing issues in the past with regard to injectables. "An oral like this helps open up the ex-US obesity opportunity, especially in developing markets where cold-chain storage can be problematic," the analysts wrote.

Orforglipron is not the first oral GLP-1 receptor agonist -- the differences are more nuanced than that. Novo's Rybelsus, a peptide-based oral semaglutide, was approved by the Food and Drug Administration back in 2019. The FDA approved a label update for Rybelsus in 2023, allowing it to be used as an initial therapy for adults with Type 2 diabetes.

Competition in the market is stiff, and Lilly aims to set itself apart. Its treatment portfolio spans a range of medical specialties from oncology to immunology. Following the success of Zepbound and Mounjaro, the company is particularly eager to expand its basket of weight-loss drugs.

Zepbound and Mounjaro certainly have earned their reputation as blockbuster drugs. Lilly noted that their volume growth was the driver behind a 45% increase in revenue during the most recent quarter.

If orforglipron passes every trial and ultimately secures FDA approval, Lilly is confident it will be able "to launch the drug worldwide without supply constraints," the company said.

Orforglipron is roughly halfway through its seven scheduled Phase 3 trials. Assuming all goes according to plan, Lilly said it expects to file for regulatory approval for it as an obesity treatment by the end of the year, and for diabetes treatment in 2026.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com and George Glover at george.glover@dowjones.com

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April 24, 2025 10:11 ET (14:11 GMT)

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