Forget the oral wig: This weight-loss drug might be an even bigger winner

In January, New Nordisk (NYSE: NVO ) Vigoi has broken new ground in the weight loss market by launching an oral version of its popular anti-obesity drug. It is the first oral GLP-1 approved for long-term weight management, and Novo Nordisk hopes it will help it regain market share in this area.

While Oral Vigovi has had a successful launch so far, another oral GLP-1 could hit the market this year and usurp it. Here’s what investors need to know.

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last year, Eli Lilly (NYSE: LLY ) Orforglipron, an oral GLP-1 drug, posted strong Phase 3 results to help with weight management and A1C lowering in patients with type 2 diabetes. Lilly has submitted the drug to regulators for approval, which could come as early as the second quarter, so it can prepare to launch orforgliprone. The company already has about $1.5 billion in inventory, and management said it would be ready to implement it about a week after approval.

Although Eli Lilly already dominates the weight loss market thanks to Zip Bound, Orforgliperone should help cement its leadership. There are three reasons.

First, as Lilly noted, oral Vigovi is actually expanding the market, not just capturing existing weight loss patients who were previously taking topical medications. Orforglipron, then, could have a similar path, helping the company attract new patients who were reluctant to start treatment because they didn’t like needles, or because the storage requirements for the injections were too difficult.

Second, orforglipron does not require restrictions on food or beverage intake. In contrast, oral Vigovi must be taken first thing in the morning on an empty stomach, a (seemingly) minor detail that could help the new drug attract a meaningful number of patients.

Third — and perhaps most importantly — while oral Vigovi is only indicated for weight loss, orforglipron can also be approved for diabetes. Phase 3 performance was particularly strong in reducing excess weight in patients with type 2 diabetes. It also performed better than Rybelsus — another oral GLP-1 marketed by Novo Nordisk — at lowering patients’ A1C levels.

This strongly suggests that orforgliprone could enjoy strong adoption among doctors and patients, helping Eli Lilly dominate the oral weight loss market.

Eli Lilly has beaten the market over the past five years, but its stock can still deliver the best returns from here. The work of drug manufacturers in this therapeutic area is an important cause. Analysts continue to project that the anti-obesity space will grow rapidly in the coming years. And Eli Lilly has not only established itself as a leader, but also boasts a pipeline of candidates that puts its competitors to shame.

Orforglipron is just one of them. Eli Lilly’s retatretide, a drug that mimics the action of three gut hormones (no “triple agonist” has yet been approved), posted excellent Phase 3 results last year.

Lilly should remain a leader in this segment for the foreseeable future, and the company is using its success in the field to expand and diversify its pipeline. The healthcare giant is well positioned for strong financial results and returns above the market average.

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Prosper Junior Bakiny holds positions at Eli Lilly and Novo Nordisk. The Motley Fool recommends Novo Nordisk. Motley Fool has a disclosure policy.

Forget Oral Wedgie: This Weight Loss Drug May Be an Even Bigger Winner Originally Posted by The Motley Fool