Novo Nordisk stock shot up to a record high Thursday after the drugmaker said its experimental oral weight-loss drug outperformed blockbuster Wegovy in an early-stage study.
After 12 weeks, patients who took Novo's daily pill, amycretin, lost more than 13% of their body weight, according to Reuters. In comparison, the company's already approved weekly shot lost about 6% of their body weight over the same time period.
Evercore ISI analyst Umer Raffat called the results "solid" for amycretin. Wegovy targets a hormone called GLP-1. Amycretin loops in GLP-1 and a second hormone, amylin. Amylin delays food intake and stomach emptying, and decreases blood sugar levels, according to the National Library of Medicine.
Raffat notes that these early data don't capture the full potential of amycretin. Recipients barely reached the highest dose by week 11, and Novo reported the results at week 12.
Novo plans to start a Phase 2 study in the second half of 2024. The results of that test are expected in early 2026.
Novo Nordisk stock surged almost 9% to 135.92, hitting a new all-time high. Eli Lilly, which has its own weight-loss drug Zepbound, rose a small fraction to 780.16, reversing earlier losses.
Novo Nordisk Stock Flies, And Slams Viking Shares
Novo Nordisk is far from the only drugmaker hoping to add a second — or third — target to improve the weight loss seen with GLP-1 agonists.
Lilly's approved weight-loss drug, Zepbound, targets GLP-1 and a second hormone called GIP. Viking Therapeutics is using the same approach with an experimental weekly shot and a daily pill. Amgen's MariTide targets GLP-1 and a hormone called GIPR.
Viking shares rocketed 121% on Feb. 27 after the biotech company said a weekly shot of its weight-loss drug resulted in up to 14.7% weight loss over 13 weeks. That was 13.1% better than the placebo group. Eli Lilly stock lost 0.9% that day, while Novo Nordisk stock dipped 1%.
On Thursday, Viking shares tumbled 18.8% to 74. Amgen stock also skidded 1.4% to 272.86.
William Blair analyst Andy Hsieh says the majority of Viking's valuation is tied to its weekly shot, which has shown competitiveness against Lilly's Zepbound. In a 13-week study of Zepbound, patients lost 7% to 8% more weight than placebo recipients.
Viking expects to unveil the results of its experimental pill this quarter. For Viking's drug to compete with Novo's amycretin, it will have to lead to 4% to 5% more weight loss than a placebo over four weeks, Hsieh said. Over that same period, amycretin appears to have generated 2% to 3% weight loss.
"While we emphasize that the study provides only a glimpse into the clinical profile of amycretin, we concede that investors will invariably place undue weight on the amycretin data, given the exceedingly large commercial opportunity in the metabolic dysfunction space," he said in a report.
Hsieh didn't list a rating on Novo Nordisk stock.
Manufacturing Weight-Loss Drugs
Despite enthusiasm for amycretin, Novo Nordisk will face one key snag: manufacturing.
The drugmaker is already failing to keep pace with demand for its semaglutide injections. Semaglutide is the active drug behind Wegovy and type 2 diabetes med Ozempic. The Food and Drug Administration currently lists semaglutide and tirzepatide shots as in shortage. Tirzepatide sells as Lilly's Zepbound.
But, to make an effective oral medicine, the company will need a lot more drug. For example, the shot version of semaglutide requires 2 milligrams per week. The oral version, diabetes treatment Rybelsus, requires 14 milligrams per day — or 98 milligrams per week.
"By my math, Novo currently makes about 30 million milligrams of GLP-1 (semaglutide) per week in the U.S.," Raffat said. "If the current total prescription volume is converted to oral amycretin high dose, Novo would need 1 billion milligrams per week for the U.S. alone."
He notes Novo is working to update how it packages the drug. This could cut down the amount of drug a patient needs, and get around the manufacturing bottleneck.
Despite these struggles, excitement continues sending Novo Nordisk stock to record highs. Shares topped a profit-taking zone on Thursday and are now almost 29% extended from a January breakout.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
