Novo Nordisk’s Wegovy pill has taken the lead in the GLP-1 market, with tens of thousands of people starting the medication in the four months since its launch in the U.S. The majority of these patients are new to the GLP-1 category. This early success has forced investors to rethink the opportunity in oral GLP-1s and which company might win it.
According to LifeMD CEO Justin Schreiber, the launch of oral medications has improved access, and his company saw its business double almost overnight. LifeMD went from seeing between 300 and 400 new patients a day to 600 to 1,000 new patients a day.
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Novo Nordisk’s Head Start
Novo Nordisk had a three-month head start on Eli Lilly, and it used this time to shape the narrative and combat concerns about the pill’s efficacy and usage. The company pushed the pill’s lower entry price of $149 per month and injection-like efficacy, and even tapped celebrities like DJ Khaled for its first-ever Super Bowl ad.
BMO Capital Markets analyst Evan David Seigerman noted that Novo’s early success has upended the expectations of some investors and analysts who expected the Danish company would fall behind its U.S. rival in the oral category. Seigerman said, “We were all in this camp of Foundayo, Foundayo, Foundayo because Lilly was talking it up and we were also concerned about making enough peptide because Novo was still coming out of shortage.”
Eli Lilly’s Foundayo Launch
Eli Lilly launched its own pill, Foundayo, last month, but early signs indicate its rollout has been more modest than the Wegovy pill’s start. While Novo was able to leverage the Wegovy brand recognition right out the gate, Lilly is trying to introduce people to an entirely new brand. Foundayo has a different active ingredient than its best-selling weight loss shot Zepbound.
In the first few weeks of the launch, more than 20,000 people have started taking Foundayo, according to Lilly CEO Dave Ricks. More than 1,000 people are starting the drug every day, and 80% of those patients are new to GLP-1 drugs. However, Lilly still needs to build consumer awareness around the pill, and Ricks said the company hasn’t started widely advertising it on TV.
RBC analyst Trung Huynh said investors should wait two or three months to judge the momentum of Lilly’s Foundayo launch because there’s so much early volatility. He thinks it’ll take a year or two for the story to play out, citing the market for weekly shots, where prescriptions of Zepbound surpassed those for Novo’s Wegovy six months after Zepbound was introduced in the U.S.
Market Expansion
The Wegovy pill and Foundayo are helping to expand the GLP-1 market, reaching patients who wouldn’t have otherwise sought treatment due to a fear of needles or difficulty accessing the injections. According to Jamey Millar, Novo’s head of U.S. operations, “There’s a fair number of patients that don’t want to be stuck by the needle in the case of a vial and syringe or stung by the price.”
People are choosing GLP-1 pills “by a huge factor” more than shots through telehealth platform Sesame, said president and co-founder Michael Botta. He attributes the preference to the lower price of the pills versus the shots and the fact that people are more comfortable trying oral drugs than going straight to shots.
Novo hasn’t disclosed any specifics around a potential launch of its Wegovy pill outside of the U.S., but in March it announced a $500 million manufacturing investment in Ireland to meet current and future demand for its oral products outside of the U.S. The European Medicines Agency is expected to approve the Wegovy pill later this year.
Upcoming Earnings Report
Investors will get a better look at the Wegovy pill’s performance this week when Novo reports earnings from the first quarter it was available in the U.S. Analysts have praised the strength of the rollout, which outpaced even the launch of its shots. However, Wall Street expects a significant drop in overall sales this quarter, as generic competition for the Wegovy shot threatens sales in India, China, and Canada.
Novo’s pipeline will also be a focus, as disappointments in the clinic have weighed on the stock, causing investors to wonder whether Novo’s pipeline is rich enough to help the company stay competitive. BMO’s Seigerman said, “Yes it’s shaking things up, but I still think Lilly has enough components to excel. And while Novo may win with this, they need more than one win to be the champion.”
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