It looks like simply yesterday that vaccines used to fight the COVID-19 pandemic have been all anybody within the medical world might speak about. Corporations similar to Pfizer, Moderna, and Johnson & Johnson captured myriad headlines as every of those companies performed an integral function within the growth of vaccines used to deal with COVID-19.
Whereas these three gamers nonetheless contribute to the medical world in methods past COVID vaccines, the healthcare realm seems to have moved on to its subsequent huge theme: weight reduction. Enter Eli Lilly (NYSE: LLY) and Novo Nordisk (NYSE: NVO), the makers behind blockbuster glucagon-like peptide-1 (GLP-1) agonists similar to Mounjaro, Zepbound, Ozempic, and Wegovy — all of that are used for both diabetes therapy or persistent weight administration.
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Simply to place into perspective how huge a tailwind that weight reduction area is for these firms, contemplate that Lilly’s market worth is bigger than Pfizer’s, Moderna’s, and J&J’s mixed! Furthermore, Novo Nordisk is now probably the most precious firm in Europe — forward of luxurious style powerhouse LVMH Moët Hennessy.
Whereas it is clear that Lilly and Novo Nordisk are having a second proper now, which of those shares is the higher funding? I’ll discover a number of items of current information surrounding each Lilly and Novo Nordisk, and by the tip of my evaluation, I will decide which firm I see as the higher alternative.
Wegovy versus Zepbound
Whereas Lilly and Novo Nordisk have every been accredited to deal with weight reduction, it is essential to grasp the finer particulars of their respective medicines. Novo’s Ozempic is accredited by the U.S. Meals and Drug Administration (FDA) to deal with diabetes, whereas Wegovy is primarily prescribed for weight problems care. In the identical vein, Lilly’s Mounjaro is accredited by the FDA for diabetes, whereas its sibling therapy, Zepbound, is geared towards persistent weight administration.
Earlier this month, Lilly launched outcomes from a scientific trial wherein the corporate compared Zepbound directly against Wegovy. Over the course of 72 weeks, Lilly examined Zepbound and Wegovy on a inhabitants of adults with weight problems or sufferers with “at the very least one weight-related medical downside and with out diabetes.”
Per the outcomes of the research, sufferers taking Zepbound skilled a lack of 20% of their physique weight on common. By comparability, these taking Wegovy misplaced round 14% of their physique weight. A secondary endpoint discovery was that about 32% of sufferers taking Zepbound misplaced one-quarter of their physique weight, whereas these on Wegovy solely misplaced about 16%.
Picture supply: Getty Photographs.
Novo’s newest fumble
On Dec. 20, Novo introduced information from a section 3 scientific trial showcasing its newest weight reduction candidate, CagriSema. CagriSema combines the principle energetic ingredient in Wegovy and Ozempic, semaglutide, with an amylin-based compound generally known as cagrilintide.
In keeping with the trial information, sufferers taking CagriSema skilled a 22.7% discount in physique weight on common. Whereas this handily outperforms the results of Ozempic, solely 40% of trial sufferers skilled the focused 25% discount in weight.
To make issues worse for Novo, CagriSema’s common weight lack of roughly 23% is barely superior to that of Zepbound (i.e. the 20% I reference above).
Shares of Novo received completely destroyed on the CagriSema information, with the inventory cratering as a lot as 28% simply in sooner or later.
Lilly is greater than only a weight-loss firm
Whereas the lion’s share of consideration revolving round Lilly focuses on its progress within the weight reduction realm, it is essential for traders to grasp that the corporate is a fairly gigantic and numerous operation.
Lilly additionally has a number of high-earning medicines which might be used to deal with the likes of most cancers and plaque psoriasis. This yr, the FDA accredited the corporate’s Alzheimer’s disease and eczema treatments as effectively.
Though it is nonetheless early days, I think Lilly’s entrance into these markets will start to bear fruit before later, and additional bolster the corporate’s income and revenue base by augmenting its fast-growing weight reduction operation.
The underside line
I see Lilly because the superior funding over Novo Nordisk — and albeit, I do not assume it is even shut.
Whereas I see the current declines in Novo inventory as a main instance of overblown panic promoting, Lilly’s progress in opposition to Wegovy — mixed with its numerous and rising medical portfolio — make the corporate exhausting to move up.
I feel Lilly is a no brainer alternative for traders with a long-term horizon. The corporate is well-positioned to proceed gaining momentum in opposition to Novo in weight reduction whereas concurrently main the pharmaceutical business as a complete.
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Adam Spatacco has positions in Eli Lilly and Novo Nordisk. The Motley Idiot has positions in and recommends Pfizer. The Motley Idiot recommends Johnson & Johnson, Moderna, and Novo Nordisk. The Motley Idiot has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
