Lilly weight-loss pill works as well as Ozempic, shares surge

• Plans to file for global approval by end of year
• Lilly shares rise 16%, Novo Nordisk shares slip
• Drug could be launched without supply constraints, Lilly says

April 17 (Reuters) - Eli Lilly's LLY.N experimental pill worked as well as blockbuster drug Ozempic to lower weight and blood sugar in a trial of diabetes patients, and the company said it expects to seek regulatory approvals by the end of the year.

Shares jumped 16% as results of the study, the first of several underway on the pill, orforglipron, raised hopes of an effective and easy-to-use treatment reaching a market dominated by weight-loss injections.

U.S.-listed shares of Ozempic maker Novo Nordisk NOVOb.CO, down more than 50% over the past year, fell another 7% on Thursday. "While Novo had the headstart ... this first mover advantage has waned," BMO Capital Markets analyst Evan Seigerman said in a research note.

Lilly's phase 3 trial showed that type 2 diabetes patients lost 16 pounds, or nearly 8% of their body weight, over 40 weeks. That compares favorably with Novo's injected drug Ozempic, where diabetic patients on the highest dose lost roughly 6% of their body weight.

Lilly said weight loss hadn’t plateaued at the time the study ended, suggesting that patients might lose more weight. The pill lowered blood sugar levels by an average of 1.3%. Ozempic lowered blood sugar levels by 2.1%.

Several companies are working to develop weight-loss pills, encouraged by estimates that sales of obesity treatments could hit $150 billion in the coming years. The latest data puts Lilly firmly in the lead in the race for effective oral drugs that can compete with injections.

Ozempic, approved for diabetes in 2017, is designed to target an intestinal hormone called GLP-1.

It competes with Lilly's injectable tirzepatide — sold under the brand names Mounjaro for obesity and Zepbound for weight loss — which mimics GLP-1 and a second hormone called GIP, and has demonstrated weight loss of 22% over 72 weeks.

Like Ozempic, orforglipron targets just GLP-1, but unlike hormone-mimicking peptides, it is a synthetic small molecule drug.

READILY MANUFACTURED

Pills such as orforglipron could mean wider access to effective weight-loss options since the manufacturing is simpler.

Lilly said orforglipron's safety profile was consistent with other GLP-1s, allaying some worries over a potential stumbling block to sales.

The "data is fantastic from an efficacy standpoint," said Kevin Gade, chief operating officer at Bahl & Gaynor, which owns Lilly's shares.

Lilly said it would report data from another trial for the pill for weight management later in the year. It plans to file for approval with global regulators for weight loss by the end of this year and for diabetes next year.

"While this trial alone is very good, this just bodes extremely well for their trial in obesity patients," said Gade.

The late-stage trial found that 13% to 18% of patients given the drug experienced nausea across doses, compared with 2% on placebo. The rate for diarrhea was 19% to 26% and vomiting 5% to 14%.

"These results firmly validate the tolerable profile of orforglipron," Seigerman said.

On Monday, Pfizer PFE.N discontinued development of its experimental weight-loss pill danuglipron after a trial patient experienced potential drug-induced liver injury that resolved after the medication was stopped.

Lilly said no liver-related safety signal was observed in its trial.

The company said 8% of patients on orforglipron's highest dose discontinued treatment due to adverse events.

Levels of HbA1c, a measure of blood sugar over time, fell by an average of 1.3% to 1.6% across doses.

After 40 weeks of treatment in the multi-dose trial, Lilly said once-daily orforglipron showed body weight reductions of 4.7% at 3 mg, 6.1% with 12 mg, and 7.9% with 36 mg. Patients on placebo lost 1.6%.

Lilly said it was confident in its ability to launch orforglipron worldwide without supply constraints, if approved. The company recorded $550 million related to the drug's inventory in its financial statements in February.