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Shares of Eli Lilly plummeted 14% on Thursday, pacing what would be the stock’s largest loss in decades after the pharmaceutical giant unveiled data for its obesity treatment pill that fell behind Wall Street’s expectations.
Eli Lilly’s shares dropped more than 14% to around $639 as of about 2:25 p.m. EDT, marking what would be the company’s steepest single-day loss since a 29% decline on Aug. 8, 2000.
Eli Lilly on Thursday released data for its daily obesity pill, orforglipron, which found the medication helped obese or overweight patients without diabetes lose just over 12% of their body weight in a late-stage trial, behind analyst expectations of 15%, according to FactSet.
The highest dosage of Eli Lilly’s experimental pill helped more than 59% of patients lose at least 10% of their body weight, while nearly 40% of patients lost at least 15%, and the company said orforglipron helped lessen cardiovascular risks.
The findings trailed late-stage trial data from Novo Nordisk, which reported average weight loss of 15% among patients who used an oral version of its Wegovy treatment earlier this year.
Eli Lilly CEO David Ricks told CNBC the company was “not disappointed with these results,” which he noted were “right on thesis for us” despite falling “one or two points below what [Wall Street] had.” Orforglipron’s average weight loss was “in the range” of what consumers would want to achieve, Ricks said.
Earlier testing of orforglipron in adults with Type 2 diabetes impressed investors in April, after Eli Lilly reported the highest dose of orforglipron helped patients lose nearly 8% of their body weight, or roughly 16 pounds on average, over a 40-week trial. That data matched Wall Street’s projections, and Eli Lilly said trial data indicated its pill helped patients with Type 2 diabetes lower their blood sugar and had safety similar to weight-loss injections already on the market. Eli Lilly’s shares surged more than 14% at the time, one of the company’s largest single-day gains in the last five years.
Shares of Novo Nordisk rose more than 7% by Thursday afternoon in the wake of Eli Lilly’s worse-than-expected trial report.
Several pharmaceutical firms, including Eli Lilly, Pfizer and Novo Nordisk, have competed to develop a weight-loss pill following the commercial success of Novo’s Ozempic and Wegovy in recent years. Some health experts have argued an oral weight-loss medication would be cheaper to produce and greatly expand the market to more consumers compared to injections, which are the only forms of the drugs currently available. Eli Lilly indicated it would file for regulatory approval of orforglipron by the end of the year, while Novo Nordisk’s treatment is currently under regulatory review, with a decision by the Food and Drug Administration reportedly expected in late 2025. Testing of Pfizer’s twice-daily danuglipron was abandoned by the company after trial data suggested the drug could adversely affect the liver. Roche and Viking Therapeutics are similarly developing oral weight-loss drugs and reported average weight loss of 6.1% and 8.2% in early- and mid-stage trials, respectively.