Copyright Reuters
Sign up here. Ozempic maker Novo, meanwhile, is going through boardroom turmoil and racing to bolster its U.S. team. "The issues that Novo is facing haven't really changed," said BMO Capital analyst Evan Seigerman, adding that Novo's restructuring does not inspire investor confidence. "They're still facing their internal issues." WHO WILL BE NEXT TO GET A DEAL WITH TRUMP? Analysts expects that Lilly's results on Thursday will land close to expectations. Third-quarter sales are expected to grow about 40% from last year to $16 billion, according to LSEG data. Third-quarter adjusted earnings per share is seen at $5.69. Novo, which reports earnings on November 5, is expected to post revenues of 77.4 billion Danish crowns ($12.09 billion) for the third quarter, representing 8% growth from last year and operating profit of 28.45 billion, according to LSEG data. Lilly shares have gained roughly 6.2% so far this year, in contrast to Novo's slump of about 46%. Trump has promised Novo's Ozempic will cost less than $150 per month, though a top health official said earlier in October pricing talks for GLP-1s were ongoing. "We're waiting to see who will be next to secure a deal with Donald Trump," said Paul Major, a portfolio manager at Bellevue Asset Management, which does not currently hold Novo shares. "If it's Eli Lilly, and it is negative for the pricing environment for GLP-1 drugs more broadly, then that is going to be the overwhelming driver of Novo's share price." NOVO-CVS DEAL NOT A CONCERN FOR LILLY But they are not overly concerned as prescription data from market research firm IQVIA still shows Zepbound gaining market share from Wegovy, suggesting demand remains robust despite access hurdles. Lilly's drugs are clinically superior, lending strength to the idea that they can capture more sales even when prices are low, said James Shin, director of Biopharma Equity Research at Deutsche Bank. In separate studies, Zepbound helped patients lose more than 22% of their weight after 72 weeks, while Novo's Wegovy led to 15% weight loss after 68 weeks. MARGINS, FUTURE DRUG PIPELINE COULD HELP LILLY Lilly was the first to introduce lower-priced Zepbound vials and new savings programs for self-pay patients, while expanding manufacturing capacity. If the U.S. government wrests drug price cuts from both Lilly and Novo, Lilly has a stronger cushion as it retains a higher proportion of revenues from the drugs after costs for production, analysts said. That cushion and a diverse pipeline of medicines in late-stage development has helped keep Lilly a market favorite despite its steep valuation of more than $700 billion. BMO's Seigerman said while excitement around weight-loss drugs has risen as Wegovy and Zepbound have become more popular, the fundamental earnings and sales figures from Lilly and Novo still need to back up that enthusiasm. But for now, investors see this quarter as "a sideshow", said Deutsche Bank's Shin: "Who can run the better business when prices come down? That is still Lilly today." ($1 = 6.4029 Danish crowns) Reporting by Mrinalika Roy in Bengaluru, Bhanvi Satija and Maggie Fick in London; Editing by Adam Jourdan, Caroline Humer and Devika Syamnath Our Standards: The Thomson Reuters Trust Principles., opens new tab Mrinalika is a business reporter. She has covered the energy and mining industry in North America for Reuters since 2022 and is based in India. Bhanvi is a London-based reporter covering European pharmaceutical companies and the healthcare industry. She previously covered U.S. health and pharma firms, with a focus on the new weight loss drugs that are transforming the obesity treatment space. Her coverage includes a trend piece on the underuse of their weight-loss drugs among men, increased interest in therapies being developed for preservation of lean mass, and a scoop on gene therapy maker Sarepta defying an FDA order to stop shipping its muscular dystrophy treatment.
