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Key Takeaways
- U.S.-listed shares of Novo Nordisk plunged 7% in intraday trading Thursday after rival Eli Lilly reported positive oral weight-loss drug news and BMO cut its rating for the Danish drug developer's stock.
- BMO downgraded its rating on Novo Nordisk's stock to "market perform" from "outperform" and slashed its price target to $64 from $105.
- BMO said Novo Nordisk has lost its early lead in the weight-loss drug race to Eli Lilly.
U.S.-listed shares of Novo Nordisk (NVO) plunged 7% in intraday trading Thursday after rival Eli Lilly (LLY) reported positive oral weight-loss drug news and BMO cut its rating for the Danish drug developer.
Eli Lilly on Thursday released Phase 3 trial results for its oral weight-loss drug that “demonstrated statistically significant efficacy results and a safety profile consistent with injectable GLP-1 medicines.”
BMO has downgraded Novo Nordisk to “market perform” instead of “outperform”, and reduced its price target from $100 to $64. The firm believes that “obesity rival Lilly has made significant advancements in its clinical and commercial portfolio, causing Lilly to overtake Novo’s early lead.”
Lilly weight-loss drug update likely to pressure Novo Nordisk stock
"Key updates from Lilly's oral GLP1, orforglipron, are likely to pressure shares, only to be compounded by what we believe to be a softer 1Q," BMO analysts wrote.
Novo Nordisk – which produces Ozempic, Wegovy and other blockbuster weight loss drugs – has been in a race against Lilly, the maker of Mounjaro, Zepbound and other weight-loss drugs – to be at the top of the market. Novo Nordisk has lost more than half its value in the last 12 months.
Eli Lilly shares rose 16% in intraday trading to lead S&P 500 gainers. They had been slightly in the negative for the last 12 months until Wednesday.
