Novo Nordisk And Eli Lilly currently dominate the booming marketplace for a category of medicine for weight reduction and diabetes.
But Eli Lilly may regularly gain a bonus over its Danish competitor within the battle for growing demand for these treatments, also referred to as GLP-1.
This became clear last week after the 2 corporations announced their respective second-quarter results.
“Lilly is pulling ahead in the metabolic duopoly,” Evan Seigerman, an analyst at BMO Capital Markets, said in a research note on Thursday.
On August 7, Novo Nordisk revised down its full-year earnings forecast after the corporate reported that quarterly sales of its weight-loss injectable Wegovy were well below Wall Street expectations. The disappointing result was on account of higher-than-expected price concessions to pharmacy profit managers, who negotiate drug discounts with manufacturers on behalf of insurers, executives said on a conference call last week.
Revenues from the successful diabetes drug Ozempic also fell in need of expectations for this era. The company's shares plummeted.
Nevertheless, Novo Nordisk has barely raised its forecast for sales growth for the total 12 months.
Eli Lilly's quarterly report a day later was a really different story. The Indianapolis-based company's weight-loss drug Zepbound and diabetes drug Mounjaro beat second-quarter expectations.
Eli Lilly raised its 2024 revenue forecast by $3 billion and increased its full-year earnings forecast on account of strong performance from Zepbound and Mounjaro, in addition to “improved clarity” regarding the corporate’s manufacturing expansions for those drugs.
Unlike Novo Nordisk, Eli Lilly benefited from higher U.S. prices for Mounjaro within the quarter as use of savings card programs for the drug declined. Executives said they expect “stable pricing” for Mounjaro and Zepbound within the last two quarters of 2024.
Eli Lilly shares closed greater than 9% higher on Thursday.
Some analysts were particularly pleased with Eli Lilly's positive production numbers. Demand for weight-loss and diabetes drugs outstrips supply within the U.S., so corporations that may quickly deliver large quantities of a product to patients can gain a bonus on this area.
All doses of Mounjaro and Zepbound at the moment are listed as available within the U.S. Food and Drug Administration's drug shortage database. Some doses of Wegovy at the moment are only available in limited quantities as Novo Nordisk invests billions in expanding its own production.
In a research note Thursday, Bank of America analysts raised their combined revenue forecast for Mounjaro and Zepbound to $19.7 billion in 2024, $31 billion in 2025 and $38.5 billion in 2026 as they “have become more familiar with supply dynamics.”
The analysts said there could still be temporary supply shortages of Mounjaro and Zepbound within the near future “as access improves and physicians become more comfortable with the availability of the products.” But they praised Eli Lilly's progress in expanding its manufacturing capability and provide.
For example, Eli Lilly CEO David Ricks said in a conference call on Thursday that the corporate has built six manufacturing plants, a few of that are already in operation, and hired hundreds of staff to extend production. The company acquired one other site earlier this 12 months.
Eli Lilly expects production of incretin drugs – one other term for weight reduction and diabetes treatments – to be 50% higher within the second half of 2024 than in the identical period last 12 months, he added.
Ricks said Eli Lilly's ability to extend production of Zepbound and Mounjaro gives the corporate confidence to compete with latest entrants in the load loss and diabetes drug market that won’t have the identical capability.
“I don’t know if it’s an obstacle, but it’s certainly work to scale production,” Ricks said.
“You're talking about making things on a billion-dollar scale, which takes time, is technically difficult and very capital intensive,” he continued. “So of course competitors will have to come. But there is still a long way to go for all these [other drugmakers] that the two leading companies have already gone large parts of it.”
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Health technology news: Stryker acquires AI startup Care.ai
Medical technology company Stryker announced on Monday that it has agreed to acquire Care.ai, another deal in the field of artificial intelligence in the healthcare sector.
Care.ai uses tools such as AI-powered sensors to help doctors monitor patients and workflows in hospitals, nursing homes and assisted living facilities. The company has 27 million US dollars by Crescent Cove Advisors in 2022.
Stryker offers medical and surgical devices, as well as a range of products in the orthopedics and neurotechnology sectors. The company said technologies like Care.ai's are “increasingly vital” as healthcare organizations grapple with challenges such as nursing shortages, burnout, administrative burdens and workplace safety concerns, according to a Release Monday.
Terms of the transaction were not disclosed, and Stryker said the acquisition was subject to customary closing conditions.
Stryker shares were largely unchanged on Tuesday.
“Care.ai will help Stryker significantly advance our IT and digital vision in healthcare and supply our customers with intelligent and connected real-time decision support that improves the lives of caregivers and their patients,” said Andy Pierce, group president of MedSurg and Neurotechnology at Stryker, in the press release.
The technology offered by Care.ai will integrate “seamlessly” with Stryker's platforms and devices, the company added.
“Our commitment to simplifying and improving the lives of healthcare professionals and patients remains unwavering,” said Chakri Toleti, founder and CEO of Care.ai, in a Post on LinkedIn“Together, we are transforming healthcare and ensuring that the well-being of those who need care and those dedicated to caring for others always remains our top priority.”
Stryker declined to comment. Care.ai did not immediately respond to CNBC's request for comment.
Read the full announcement Here.
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