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The stock price of the two most prominent players in the diabetes and obesity care market, Novo Nordisk NVO and Eli Lilly LLY, rose 3% and 2.3% on Tuesday, respectively, after results from a study showed that GLP-1 drugs cut the risk of several heart conditions, kidney diseases and brain ailments.
New evidence regarding the additional benefits (besides weight loss) and risks of glucagon-like peptide-1 (GLP-1) receptor agonists from a large study in nearly two million diabetes patients was published in Nature Medicine on Jan. 20, 2025.
Data from the study, conducted over roughly 3.5 years, suggest that GLP-1 drugs compared to other diabetes medications were associated with a reduced risk of numerous conditions, including heart disease, stroke and kidney disease. They decreased the risk of psychotic disorders by 18%, Alzheimer’s disease by 12% and addiction disorders by an average of 13%.
Novo Nordisk markets its blockbuster semaglutide (GLP-1) medicines as Ozempic pre-filled pens and Rybelsus oral tablets for type II diabetes (T2D) and Wegovy injections for weight management. NVO’s arch-rival, Lilly, markets tirzepatide, a dual GIP and GLP-1 receptor agonist, as Mounjaro for T2D and Zepbound for obesity.
In the past three months, shares of Novo Nordisk and Lilly have plunged 30% and 17.8%, respectively, compared with the industry’s 16.4% decline.
Image Source: Zacks Investment Research
The data from the study corroborates the results from an exploratory one-year study of semaglutide conducted by the University of Oxford, announced in July 2024. Data from the study showed that semaglutide was associated with benefits like lowering the risk of cognitive problems and nicotine misuse. The study found that the drug was not associated with a risk of adverse neuropsychiatric outcomes compared with other antidiabetic medications.
However, the study results published in Nature Medicine suggest that GLP-1 drugs are associated with increasing the risk of developing arthritis and pancreatitis.
Label Expansion Efforts for Wegovy and Zepbound
Novo Nordisk’s Wegovy and Lilly’s Zepbound have both seen strong sales since launch due to tremendous demand in the market for weight-loss drugs. However, supply issues and strict regulations for insurance coverage have resulted in a slowdown in the sales growth of these drugs in recent quarters.
NVO and LLY have been working on expanding the labels of their respective obesity medicines for several indications like cardiovascular risk reduction, sleep apnea or metabolic dysfunction-associated steatohepatitis (MASH) among others to ensure insurance coverage under Medicare and better patient access.