Eli Lilly Stock (LLY) Pops as Weight-Loss Drug Data from Rival Novo Nordisk Disappoints

Eli Lilly’s (LLY) stock is marching higher on news that rival Novo Nordisk (NVO) has issued data on its newest weight-loss drug candidate that disappointed.

Novo Nordisk, which makes the weight-loss drug Wegovy, reported trial results for its experimental obesity treatment called “CagriSema.” Patients with chronic obesity who adhered to treatment saw a mean weight loss of 22.7% at 68 weeks, compared with 2.3% in a placebo group. Half the trial participants were no longer obese at the end of their treatment.

While those results might sound impressive, they actually fell short of the 25% weight loss that had been the target of Novo Nordisk and the expectation of analysts and investors. Consequently, NVO stock is down 6% in New York trading on June 23.

Lilly’s Gain

Novo Nordisk’s loss appears to be Eli Lilly’s gain, with LLY stock up more than 1% on the same day that NVO stock is sinking. There are growing perceptions that U.S.-based Eli Lilly is pulling ahead of Danish rival Novo Nordisk in the global battle over weight-loss medications.

Citi Research (C) analyst Paul Lejuez wrote in a note to clients that the CagriSema results are the latest setback for Novo Nordisk, and that market developments as of late appear to favor Eli Lilly’s Zepbound weight-loss drug, which is approved for weight management and the treatment of Type 2 diabetes.

Also on June 23, Novo Nordisk announced an end to its partnership with Hims and Hers Health, citing concerns over “illegal mass compounding and deceptive marketing.”

Is LLY Stock a Buy?

The stock of Eli Lilly has a consensus Strong Buy recommendation among 19 Wall Street analysts. That rating is based on 16 Buy, two Hold, and one Sell recommendations issued in the last 12 months. The average LLY price target of $999.57 implies 31.05% upside from current levels.

Read more analyst ratings on LLY stock