Pharma giant Eli Lilly & Co. (LLY) has reported positive results from the mid-stage clinical trial of its new diabetes drug, which was found to be effective in reducing weight while controlling blood sugar in type-2 diabetes patients. Unlike the single-hormone drugs currently available in the market, the new formulation targets two gut hormones simultaneously.
Investors reacted positively to the announcement that marked a significant breakthrough in diabetes drug development and Eli Lilly’s market value rose sharply Thursday, with the stock price hitting an all-time high. On the other hand, rival drug maker Novo Nordisk (NVO), whose diabetes portfolio mainly comprises the traditional single-hormone drugs, took a huge beating at the bourses.
Betting on the weight-reduction properties of the new formulation, Lilly is looking to evaluate it further for related conditions like obesity. Once the drug is cleared for commercial use, tentatively after the late-stage trial to be carried out by the end of 2021, Lilly would gain an edge over its peers whose diabetes portfolio is currently limited to the single hormone drugs.
Betting on the weight-reduction properties of the new formulation, Lilly is looking to evaluate it further for related conditions like obesity
“Despite the progress we’ve made in diabetes management, people living with type-2 diabetes often need additional treatments as their condition progresses. That’s why our researchers continue innovating — to help make lives better,” said Jeff Emmick, VP of product development at Lilly Diabetes.
Experts point out that the dual qualities of the drug would be helpful to the large population of Americans suffering from type-2 diabetes, a condition that is closely linked to obesity. With no potential competitor in the market yet, the new drug is expected to become a part of Lilly’s large diabetes portfolio that currently accounts for nearly 40% of the company’s annual revenue.
Eli Lilly shares have been on a steady upward trajectory in recent months, gaining about 29% since the beginning of the year. The stock reached a new peak this week, exceeding the previous highs seen a decade ago.
Lilly’s gain was Novo Nordisk’ loss. Novo’s shares fell more than 7% in the early hours Thursday and traded lower throughout the session. Over the past 12 months, the stock lost about 12%.