Yahoo Finance Diabetes, weight loss drugs drive growth for Novo and Lilly despite shortages
Novo Nordisk (NVO) and Eli Lilly (LLY) stocks were both boosted by sales of their Type 2 diabetes and weight loss drugs in the third quarter, despite shortages of supply of the three popular products — Novo's Type 2 diabetes drug Ozempic, its weight loss drug Wegovy, and Lilly's Type 2 drug Mounjaro — the companies announced Thursday.
The three drugs have seen a spike in popularity this year due to the unprecedented total body weight loss they provide compared to older GLP-1s — drugs that mimic a hormone in the body that slows digestion and promotes insulin production.
Wegovy sales hit $1.37 billion in the third quarter, marking a 200% increase, along with an older drug, Saxenda, for obesity sales year-over-year for Novo.
The company saw a 60% growth in the GLP-1 portfolio alone for the first nine months of 2023. Wegovy sales grew 467% in the first nine months, according to North America executive vice president Doug Langa.
High demand continues to outstrip supply for Wegovy and Ozempic — which together brought in $4.8 billion in sales in the quarter — forcing Novo to continue to control output of the drugs in higher doses and focus on existing patients. This has limited how many new prescriptions the company will see until it can boost production.
Eli Lilly, meanwhile, saw $1.41 billion from Mounjaro, which is still only approved for diabetes but is awaiting FDA approval as a standalone weight-loss drug by end of year. The company is ramping up production as a result of anticipation that demand will outstrip supply.
Read more: Ozempic, Wegovy, and other weight loss drugs’ real business impact
Company executives said on an earnings call Thursday that Lilly is relying on a diverse group of manufacturers to help boost its supply.
"We're not at all happy with the capacity we've announced already. You'll see more — some we don't announce — that we'll just layer into the volume we ship," said CEO David Ricks.
The two companies are dueling for future market share. To do so, they must also focus on convincing major payers — government, insurance companies, and employers — to continue to cover the cost of the drugs.
Novo Nordisk focusing its efforts this health benefits enrollment season in ensuring that employers cover Wegovy.
This year saw a number of companies and organizations halt coverage as costs spiked as a result of the popularity of the injectables for weight loss. Recent surveys show that there is more support for coverage from larger companies and coverage is set to double for 2024.
To address any concerns, Novo Nordisk has sales representatives offering strategies like wellness and weight management apps or care to support the use of their drugs.
"There is variability in employer coverage and reimbursement for anti-obesity medications. Currently, more than 45 million patients with obesity have access to this therapy class, which represents a trend of expanded coverage in government healthcare and commercial plans," Novo Nordisk said in a statement to Yahoo Finance.
Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. Follow Anjalee on all social media platforms @AnjKhem.
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