Novo Nordisk (NYSE: NVO) inventory slipped 1.7% by way of 12:10 a.m. ET Monday on a pair of stories objects with which buyers appear lower than thrilled:
First, Novo Nordisk is increasing its program to promote Wegovy GLP-1 weight reduction medication at discounted costs. Second, Novo is spending $2 billion to license a wholly totally different GLP-1 drug from China.
In distinction, Eli Lilly (NYSE: LLY) and Hims & Hers Well being (NYSE: HIMS) each jumped on at the moment’s information. They rose 2.7% and seven%, respectively.
Let’s take Novo Nordisk’s information objects one by one, beginning with Wegovy. Novo Nordisk introduced earlier this month that its NovoCare Pharmacy would promote Wegovy direct to cash-paying customers who do not use insurance coverage to pay for his or her prescriptions. Every of the corporate’s dose strengths would promote for $499 for a one-month provide. As we speak the corporate expanded this system, saying the $499 value might be obtainable at native pharmacies, and never only for orders positioned with NovoCare.
Beforehand, pharmacy money gross sales had been priced at $650 per 30 days, so Novo has successfully minimize costs by 23% for an enormous a part of its market. Novo Nordisk buyers could also be worrying that Novo is dropping market share, and may have to chop costs even additional to compete with value cuts introduced by Eli Lilly. Final month, Lilly minimize the value of a minimum of one dosage measurement of its competing Zepbound GLP-1 drug to $349, when bought instantly from Lilly.
Lengthy story brief, buyers appear to be studying this information as unhealthy for Novo (much less income and perhaps dropping market share), however correspondingly good for Eli Lilly, which remains to be underpricing its rival on a minimum of one dosage.
On the similar time, Hims & Hers Well being inventory is constant to realize energy on the again of stories out final week, that the corporate’s exit from the GLP-1 market is probably not as imminent as feared. On Wednesday final week, The Wall Avenue Journal reported that Hims & Hers “will preserve providing pharmacy-made, or compounded, variations of Ozempic and Wegovy tweaked to particular person prescriptions.”
Because the Journal defined, “present legislation … permits compounding pharmacies to make particular, individualized variations of medication that are not obtainable commercially.” So whereas Hims & Hers has benefited mightily from with the ability to mass market Ozempic, Wegovy, Mounjaro, and Zepbound lookalikes to fill a spot in provide from the medication’ inventors, and whereas that offer hole goes away, Hims & Hers should have the ability to market copycat medication in smaller portions, and never be pressured out of this market fully in any case. Such gross sales would possibly even supply Hims & Hers higher revenue margins as a result of their personalization.
