Eli Lilly stock and Novo Nordisk stock both skidded Tuesday on a report that most patients taking weight-loss drugs like Wegovy stopped within a year.
According to an analysis from pharmacy benefits manager Prime Therapeutics, only about a third of patients taking an obesity treatment like Wegovy were still taking it after a year. Meanwhile, total health care expenditures for the group rose markedly, Reuters reported.
The report is bearish for companies like Eli Lilly (LLY) and Novo Nordisk (NVO). Novo sells a pair of weight-loss drugs called Wegovy and Saxenda. Lilly is hoping to follow with its diabetes-turned-obesity treatment, Mounjaro.
And a slew of others are working on similar drugs that rely on the same target: a gut hormone called GLP-1 that controls satiety signals and how fast the stomach empties.
On today’s stock market, Eli Lilly stock slumped 3% to close at 439.39, while Novo Nordisk stock toppled 3.1%, ending the regular session at 152.25.
Eli Lilly Stock: Soaring Health Care Costs
On average, patients were paying $12,371 a year for health care costs before starting Wegovy or a similar weight-loss drug, according to the analysis. After starting to take the obesity treatment, costs soared 59% to $19,657.
For the analysis, Prime counted all new prescriptions in the GLP-1 drug class between January and December 2021 for patients diagnosed with obesity, prediabetes or having a body mass index of 30 or higher. The company excluded patients with type 2 diabetes.
Nearly half of patients were taking Novo’s injected drugs, Wegovy or Ozempic. The latter is a type 2 diabetes treatment that has been used off-label as a weight-loss drug. Others received weight-loss drug Saxenda or Rybelsus, an oral diabetes treatment.
Overall, 32% of patients were still taking their weight-loss drugs a year after the initial prescription, spelling bad news for Eli Lilly stock and Novo Nordisk stock. All patients had insurance coverage.
It’s unclear why patients dropped their weight-loss drugs. Many patients don’t receive insurance coverage for obesity treatment….