Shares of Novo Nordisk (NYSE:NVO) and Eli Lilly and Co (NYSE:LLY) dropped sharply following comments from US president Donald Trump about reductions in the prices of weight loss drugs.
During a White House event focused on fertility treatments and drug pricing, Trump suggested that the cost of drugs like Novo Nordisk’s Ozempic (semaglutide), used for diabetes and weight management, would soon be “much lower.”
Trump said price reductions would happen quickly following ongoing negotiations, stating that the cost could be reduced to about $150 per month, down from approximately $1,000.
Before Friday’s opening bell, shares of both Novo Nordisk and Eli Lilly were down more than 4%.
Analysts at Deutsche Bank see Eli Lilly as best positioned should weight loss drug pricing does end up being $150 per month.
They noted that it was unclear if this would be under the Trump administration’s Most Favored Nation (MFN) policy or the Inflation Reduction Act.
The analysts wrote that the press conference signalled this would be via MFN, with the question then becoming which company has the ability to leverage weight loss volume and marketing.
“In our view, that winner is Eli Lilly given orforglipron is a small molecule that's amenable to high volume and does not require cold chain storage,”
“Oral semaglutide at 25mg removes the need for auto-injector, but 25mg of API is approximately 10x step-up versus semaglutide's max injectable dose and to us does not seem as scalable as orforglipron.”