Investors continued to dump shares of telehealth company Mangoceuticals (MGRX) during early trading on Friday. This came after pharmaceutical heavyweights Eli Lilly (LLY) and Novo Nordisk (NVO) denied entering any special obesity drug distribution arrangements with the company.
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Mangoceuticals Loses Momentum on Controversy
MGRX stock tumbled over 20% to $0.95 per share as of 5:07 a.m. on Friday, after plunging over 32% at the close of regular trading the previous day.
Shares of the Texas-based consumer health company had surged over 24% during pre-market trading on Thursday after the company claimed it had secured a collaboration with Eli Lilly and Novo Nordisk to sell their blockbuster weight-loss medications directly via its two newly-launched programs.
Mangoceuticals, which focuses on men’s health, claimed its customers will be able to purchase the pharmaceutical rivals’ popular weight-loss injections with cash at fixed prices starting as low as $499 per month, without needing insurance. The injections are Eli Lilly’s Zepbound and Novo Nordisk’s Wegovy.
However, Eli Lilly responded that it has “no affiliation” with Mangoceuticals. “We do not have any agreement or partnership with this company,” Novo Nordisk also told TipRanks in a statement.
Last year, Eli Lilly dragged Mangoceuticals to court for marketing products that the telehealth company claimed contained tirzepatide, the main ingredient in Eli Lilly’s flagship obesity injection Zepbound. Mangoceuticals told Reuters it settled the court injunction earlier this year for a nominal amount.
Obesity Market Draws Spotlight
The development comes several days after U.S. President Donald Trump disclosed that the two Big Pharma companies had agreed to reduce the prices of their obesity drugs under the federal government’s Medicare and Medicaid health insurance programs.
In 2024, when the shortage of Zepbound and Wegovy hit the U.S. market, several pharmacies and telehealth companies sold compounded versions of both medications at cheaper prices, riding on American laws that permit such during periods of shortage. Compounded medicines, unlike those approved for mass production by the U.S. Food and Drug Administration, are custom-made and prepared by pharmacists to meet a patient’s specific needs.
Obesity medications continue to sell like hotcakes, driving further competition in a market said to be worth about $70 billion. This is even as obesity among U.S. adults costs American citizens, employers, and the government as much as $210 billion per year.
What Are the Best Healthcare Stocks to Buy?
The healthcare industry remains a critical sector to investors, even as the U.S. government puts pressure on pharmaceuticals, including weight-loss drug makers, to discount drug prices. The TipRanks Stock Comparison tool provides a guide on which stocks in the industry are worth buying based on Wall Street analysts’ assessments.
