By Dominic Chopping

Novo Nordisk shares fell Tuesday after Eli Lilly announced results of a new pill that could rival the weight-loss potential of the Danish giant's blockbuster shots.

Shares fell as much as 9.8% in early European trade as investors reacted to the news on the first trading day since the Lilly announcement last week.

Novo Nordisk and Eli Lilly currently dominate the weight-loss market, but their drugs are administered by injection. Both are working on pill versions that are seen as more convenient for patients to take, as well as easier to transport and store as they don't require refrigeration.

Lilly's pill, orforglipron, was primarily tested for its effectiveness at treating type-2 diabetes, but the study measured weight loss as a secondary goal. The drug helped patients lose an average 7.9% of their body weight at the highest dose.

The orforglipron data "looks like it is set to transform the GLP-1 space and raise the bar for both oral and injectable therapies," Intron Health analyst Naresh Chouhan said in a note to clients.

The weight-loss effects and the tolerability all look comparable with Novo Nordisk's Wegovy, but given its oral form, ability to be produced relatively easily and different doses providing patient flexibility, Chouhan expects it to become the market-leading medication.

"For Novo this has severe consequences," he said.

Novo Nordisk currently offers a pill that contains the same active ingredient as its blockbuster Wegovy and Ozempic drugs, but it's marketed to treat diabetes. A higher dose version of the pill to treat weight-loss was studied in a 2023 late-stage trial, before the company delayed filing for approval.

It also has another oral weight-loss drug in early stage development.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

April 22, 2025 05:11 ET (09:11 GMT)

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