Novo Nordisk's weight-loss drug Wegovy has shown surprising initial data indicating a potential 20% reduction in the risk of heart attack and stroke over five years for some patients. The eagerly awaited study results, which are yet to be peer-reviewed, compared obese, non-diabetic patients on Wegovy to a placebo group. The trial monitored the incidence of heart attack, stroke, or death from heart disease. This development has significantly boosted the stocks of both Novo Nordisk and Eli Lilly, the maker of Mounjaro, a Type-2 diabetes drug also linked to weight loss.
Market Impact and Analyst Perspectives
The positive news has propelled Eli Lilly to the top spot in market capitalization among healthcare giants, exceeding $500 billion after adding over $70 billion. According to Lee Brown, Third Bridge global sector lead for healthcare, this represents a remarkable 20% year-over-year increase for a company of this size, signaling strong investor confidence. Morgan Stanley had estimated Lilly would trade up more than 5% based on the data.
Insurance Coverage Implications
The observed 20% reduction in stroke and heart attack risk, exceeding expert expectations, could strengthen the argument for broader insurance coverage of these drugs. Leerink Partners analysts suggest that the trial results "may raise the bar" for future drugs and create a "perception positive for LLY and the GLP-1 class in terms of payor coverage." Currently, coverage decisions by insurers and employers vary, with some requiring prior authorization or ceasing coverage for GLP-1s. However, there are indications of increasing coverage, as Eli Lilly's earnings revealed that Medicare Part D access has increased to 73% of eligible patients, compared with 60% in the prior quarter, according to TD Cowen analysts. Commercial insurers saw 67% of prescriptions paid compared to 55% in the prior quarter for Mounjaro.
Future Prospects and Ongoing Trials
Eli Lilly is also evaluating Mounjaro for additional benefits in a trial scheduled to conclude in October 2027. Mounjaro's sales contributed significantly to the company's strong revenue results in the second quarter, totaling $980 million, surpassing the Wall Street consensus of $740 million. Novo Nordisk has initiated filings with the FDA and in the UK to expand Wegovy's approved uses to include reducing the risk of adverse heart attack and stroke events.
Expert Commentary
Third Bridge's Brown noted the potential for Mounjaro to demonstrate similar effects as Wegovy, stating, "It'll be interesting to see as they progress with Mounjaro whether they'll demonstrate a similar effect. I suspect it will."
