Shares in Wegovy-maker Novo Nordisk pop 7% after GLP-1 pill approval

by · CNBC

Key Points

  • The FDA on Monday approved the first-ever GLP-1 pill from Novo Nordisk.
  • The approval gives the Danish pharma giant a head start against U.S. rival Eli Lilly.
  • "Novo actually might have an edge, and it will entirely depend on how they execute," an analyst told CNBC.

In this article

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Shares in Novo Nordisk surged over 7% Tuesday, after the Wegovy maker secured approval of its GLP-1 pill — a world first.

The U.S. Food and Drug Administration's approval of Novo Nordisk's GLP-1 pill gives the Danish pharmaceutical giant a head start over U.S. rival Eli Lilly.

The pill's starting dose of 1.5 milligrams will be available in pharmacies and via select telehealth providers with savings offers for $149 per month in early January, the firm said.

Cash-paying patients can access it for the same price via President Donald Trump's direct-to-consumer website, TrumpRx, according to the deal Novo Nordisk struck with his administration last month. Drug pricing has been top of mind this year as the U.S. looks to reduce the costs paid by consumers.

The approval caps a turbulent year for Novo, which has been marked by board drama, supply chain shortages, a bidding war against Pfizer, and criticisms over the execution of its U.S. strategy.

Eli Lilly is expected to launch its own pill soon, having filed for FDA approval.

However, Novo's clinical data looks "fantastic," Rajesh Kumar, who heads up European life Sciences and healthcare equity research at HSBC, told CNBC's "Squawk Box Europe" on Tuesday.

It has food and water restrictions, which may make it harder for GPs to prescribe but its tolerability and efficacy are better than Eli Lilly's pill, Kumar said. "Novo actually might have an edge, and it will entirely depend on how they execute," he added.

Lilly also reported positive findings from a maintenance trial where patients switched directly from taking the company's injection Zepbound and Novo Nordisk's rival shot Wegovy. This may help Lilly "keep a bit of market share," Kumar said. "That's the thing we have to watch," he added.

— CNBC's Annika Kim Constantino also contributed to this report.