It is always a relief when a drug shortage is over. It is even more of a relief when that shortage involves a new, popular drug produced by a major pharmaceutical company.
This dynamic was the basis for the 3.5% increase in Eli Lilly‘S (NYSE: LLY) stock price on Thursday. Comforting words from the company’s leader caused investors to buy shares en masse, helping it to outperform the sliding S&P 500 index (which fell 1.4% that day).
On the way to the market
That drug is Zepbound, the weight-loss treatment that’s one of Lilly’s newest and most popular products. Due to the enormous popularity — combined with scarcity — of such goods, Zepbound was officially a scarce commodity in the U.S. market. It now plans to change that status in the very near future.
“I think we want to get out of that process today or tomorrow,” David Ricks, CEO of the pharmaceutical giant, said in an interview published Thursday morning in Bloomberg.
Zepbound and its twin, diabetes treatment Mounjaro, have been on the Food and Drug Administration’s (FDA) shortage list since late 2022, resulting in an explosion in demand following the FDA’s approval of New Nordisk‘s Wegovy; like Zepbound, Wegovy is actually the maker’s diabetes treatment (Ozempic), approved and marketed for obesity.
Hot news for a hot drug
Lilly and Novo Nordisk are the two pioneers in the glucagon-like peptide 1 (GLP-1) weight loss drug space. As such, they are currently the only stocks with approved products on the market. So what happens with Zepbound and Wegovy really matters — even to Lilly, an established player in this space with a huge product portfolio spanning multiple therapeutic categories.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
Why Eli Lilly Stock Beat the Market Thursday was originally published by The Motley Fool
