It's been a great run, but Ozempic's spotlight could begin fading fast. New research strongly suggests a competing diabetes treatment from Eli Lilly (LLY 1.19%) is even better at helping patients manage their weight than the leading brand.
Recently, researchers from a data analytics business called Truveta made big waves with an independent study that compared the effectiveness of semaglutide, the active ingredient in Ozempic and Wegovy, with tirzepatide, the active ingredient in Mounjaro and Zepbound.
Image source: Getty Images.
Both drugs have been proven to help patients lose weight in individual clinical trials, but there haven't been any head-to-head studies. Truveta's findings don't carry as much authority as a clinical trial, and the data hasn't been peer reviewed. That said, it's still the most direct comparison of these two drugs we've seen to date.
What researchers found
Truveta compared the electronic health records (EHR) of 18,386 patients who were prescribed Novo Nordisk's (NVO 0.84%) semaglutide or Eli Lilly's tirzepatide. The results strongly suggest that Lilly's drug has the upper hand.
| Drug | 5% Weight Reduction | 10% Weight Reduction | 15% Weight Reduction |
|---|---|---|---|
| Tirzepatide | 81.8% | 62.6% | 42.3% |
| Semaglutide | 64.6% | 38% | 19.3% |
Data source: Truveta Research. Table by author.
After a year of treatment, patients were more than twice as likely to experience a 15% weight reduction with Lilly's treatment.
Both groups lost weight, but patients taking tirzepatide lost a lot more. At their 12-month checkups, patients prescribed tirzepatide achieved weight reductions that were 7.2% greater than the semaglutide group.
Looking ahead
In the third quarter, Mounjaro sales reached an annualized $5.6 billion. This is outstanding for a treatment that earned its first U.S. Food and Drug Administration (FDA) approval to treat type 2 diabetes in May of 2022.
Tirzepatide sales, however, are probably just getting started. A recent poll from the Kaiser Family Foundation found that 45% of the public is interested in taking a prescription weight-loss drug.
Eli Lilly's tirzepatide sales will likely see a big bump in 2024. The FDA recently approved it for chronic weight management under the brand name Zepbound.
Previously, folks seeking weight-management treatment who didn't have type-2 diabetes needed to find a physician who would prescribe Mounjaro off-label. Zepbound's approval for the chronic weight-management indication specifically should make it far easier to access.
With immense levels of demand in mind, analysts at JPMorgan have raised eyebrows by estimating $50 billion in annual sales of Lilly's weight-management drugs by 2030.
Of course, Eli Lilly is a huge pharmaceutical company made of many pieces that don't always travel in the same direction. Weight-management sales could be off the charts, but they'll need to offset some significant losses. Third-quarter sales of Alimta, Humalog, and Trulicity all fell more than 10% year over year. Combined, these drugs are still responsible for about 22% of the company's total revenue.
Time to buy Eli Lilly?
A great deal of success for its weight-management drugs is already baked into Eli Lilly's stock price. At the moment, it's trading at the sky-high multiple of 89x forward-looking earnings estimates.
Tirzepatide sales will most likely wipe the floor with semaglutide. Before adding Eli Lilly's stock to their portfolios, though, investors should understand the stock will tank if tirzepatide sales don't consistently meet elevated expectations.
I wouldn't bet against Eli Lilly right now, but the stock is too risky at its inflated valuation. It's probably best to stay on the sidelines for now.
