Darwin's Our Take: Lilly’s, Novo Nordisk’s share prices roller-coaster following earnings reports

Lilly’s, Novo Nordisk’s share prices roller-coaster following earnings reports, Hims & Hers announcement

Eli Lilly saw its share price leap Wednesday morning after the company released fourth-quarter financial results reflecting an even greater increase in revenue than analysts expected.

Propelled by volume growth in sales of Mounjaro and Zepbound (tirzepatide), Lilly’s global revenue for the quarter was $19.3 billion, an increase of 43% relative to the same quarter in 2024. The increase was 7% higher than the consensus forecast among analysts, according to Leerink Partners’ David Risinger. Lilly’s U.S. revenue for the quarter was $19.3 billion, also a 43% increase year over year.  

At $7.39, Lilly’s reported earnings per share for the quarter were up 51% compared with the previous year’s quarter, beating estimates by 9%. Adjusted earnings per share were $7.54, a 42% increase from the same quarter a year ago.

Quarterly sales of Mounjaro (tirzepatide marketed for diabetes) increased 110%, from $3.5 billion in the fourth quarter of 2024 to $7.4 billion in the most recent quarter. For the year, sales doubled, from $11.5 billion in 2024 to $23 billion in 2025.

The increase in sales of Zepbound (tirzepatide marketed for weight loss) was even greater: from $1.9 billion in the final quarter of 2024 to $4.3 billion in the most recent quarter, a 123% increase, and from $4.9 billion for the full year in 2024 to $13.5 billion last year, an increase of 175%.

Lilly’s guidance for 2026 indicates that the drugmaker believes the surge in sales will continue. The company estimates its revenue for the year will be between $80 billion and $83 billion.

A day earlier, Novo Nordisk also announced better-than-expected financial results for the fourth quarter, with earnings per share of $1.02 and revenue of $12.5 billion.

Unlike Lilly, though, Novo Nordisk said it anticipates a decline in sales growth of 5% to 13% this year at constant exchange rates. CEO Mike Doustdar said during the company’s earnings call that the guidance “reflects a year of pricing headwinds.” Those headwinds include lower U.S. prices resulting from the most-favored-nation (MFN) agreement Novo Nordisk made with the White House. (Lilly made a similar deal.)

In addition, Novo’s Wegovy and Ozempic (semaglutide) products will lose exclusivity in certain markets this year, such as Brazil, Canada, China, and India. Increased sales volume resulting from Medicare coverage of GLP-1 drugs, which is set to start this year with the BALANCE Model, could, to some extent, offset lower prices in connection with the MFN agreement and lower sales volumes due to the patent expiries.

Novo Nordisk’s guidance for 2026 sent the company’s American depository shares down sharply on Tuesday — and took Lilly’s share price down as well, until the following morning when Lilly released its earnings.

An unknown factor is how Novo’s Wegovy pill will continue to fare. Leerink’s David Risinger referred to the pill’s launch in early January as “the fastest drug launch ever.”

On the earnings call, Dave Moore, Novo Nordisk’s executive vice president of U.S. operations, said uptake of the pill “is over twice that of any prior anti-obesity drug launches in the United States.”

NBC reported last week that, already, about a month since the initial launch date, more than 170,000 people are taking the Wegovy pill, and that approximately 9 in 10 prescriptions for the pill were paid for out of pocket, not with insurance. The starting dose is priced at $149 per month for those paying cash.

Moore noted during the earnings call that most of the prescription for the Wegovy pill appear to be for patients who are new to GLP-1s, “suggesting the market is expanding.”

Both Lilly’s and Novo Nordisk’s share price dropped on Thursday when Hims & Hers announced that it would offer a “needle-free” compounded semaglutide pill priced at $49 for the first month with a five-month plan, paid up front. Starting the second month, the compounded pill would cost the “standard” price of $99 per month.  

Lilly expects the FDA to make an approval decision on its oral GLP-1 drug, orforglipron, in the second quarter.

In a statement released Thursday, Novo Nordisk said it would take legal and regulatory action to protect patients from Hims & Hers’ “unapproved, inauthentic, and untested knockoff semaglutide pill.”  

On Friday, FDA Commissioner Marty Makary posted a cautionary statement on social media: “The FDA will take swift action against companies mass-marketing illegal copycat drugs, claiming they are similar to FDA-approved products. The FDA cannot verify the quality, safety, or effectiveness of non-approved drugs.”

Hims & Hers backed down after having “constructive conversations with stakeholders across the industry.” Several news outlets reported on Saturday that the company said it would stop offering access to its compounded GLP-1 pill.

In separate news, AstraZeneca will pay $1.2 billion to bolster its weight management portfolio through a collaboration agreement with China’s CSPC Pharmaceuticals. With potential milestone payments and royalties, the collaboration could be worth $18 billion.

CSPC has eight programs in development for obesity and type 2 diabetes therapies, though the initial focus of the AstraZeneca partnership will be on four programs that use CSPC’s artificial intelligence-driven peptide drug discovery platform and the biotech firm’s proprietary LiquidGel once-monthly dosing technology.  

CSPC’s most advanced candidate, SYH2083, is set to begin Phase I testing. SYH2083 is similar to Zepbound in that it targets both the GLP-1 and GIP receptors.

AstraZeneca expects to complete the transaction, which is subject to the usual closing conditions, including regulatory approval, in the second quarter.

OUR TAKE: The prevalence of obesity in the U.S. adult population is expected to increase from 42.5% in 2022 to 46.9% by 2035, according to a study published Jan. 28 in JAMA. For comparison, the researchers said the prevalence in 1990 was 19.3%.

Translated into head counts, those percentages equal 34.7 million adults in 1990, 107 million adults in 2022, and an estimated 126 million in 2035.

For the purposes of this study, obesity was defined as a body mass index of at least 30.

Note that those prevalence rates were for adults. According to information posted on the CDC’s website in April 2024, the prevalence of obesity from 2017 to March 2020 among children and teens aged 2 to 19 years was 19.7%, the equivalent of nearly 15 million young people.

So far, the GLP-1 rivalry has been a “two-horse race,” as one news outlet put it, but the weight-loss drug market is rapidly evolving, with new competitors entering the field, next-generation therapies approaching the final stages of clinical development, and more real-world data becoming available on how the drugs affect various subpopulations, including seniors.

How well will weight-loss drugs be able to stem the tide of increasing obesity? How much impact will they have on the economy, both short term and long? Will any of them eventually be able to “cure” obesity, rather than serving as maintenance therapies? What other chronic health conditions might they be able to treat in addition to cardiometabolic illnesses?

Given the amount of money being spent on drug development and pipeline/biotech acquisitions, and the swelling popularity of weight-loss drugs among patients and prescribers, we may get answers to at least some of those questions relatively soon.

Disclosure: Novo Nordisk and AstraZeneca are Darwin Research Group clients.

Health Care Rounds #199: Dr. Natalie Baggio, President, Corewell Health South

Regional health leaders are being asked to do the impossible right now: deliver on systemwide strategy while staying deeply responsive to the realities on the ground. In rural markets especially, the pressures around access, staffing, and infrastructure are forcing health systems to rethink what “care delivery” looks like in practice. Dr. Baggio joins John to discuss balancing local priorities with system strategy, strengthening workforce pipelines to improve retention and reduce burnout, and expanding access through partnerships and new care models. Watch here or listen wherever you get your podcasts.

What else you need to know

Cigna’s Express Scripts reached a settlement with the Federal Trade Commission to resolve allegations that the pharmacy benefit manager artificially inflated insulin prices. Under the settlement agreement, Express Scripts did not have to admit any wrongdoing or pay any monetary penalties. The PBM did, however, agree to make substantial changes in its business practices, according to an FTC press release, such no longer preferring drugs with high list prices over identical lower-cost versions on standard formularies; delinking the compensation Express Scripts receives from the savings the PBM negotiates with drug manufacturers; giving plan sponsors the choice to transition away from rebate guarantees and spread pricing; establishing a standard offering for plan sponsors that bases patients’ out-of-pocket expenses on drugs’ net costs instead of list prices; and increasing transparency in its business practices with plan sponsors and community pharmacies.

Industry analysts noted that because no fines were involved, and since Express Scripts was already implementing many of the reforms included in the settlement—largely in response to lawmakers’ intense scrutiny of PBMs the past couple of years—the agreement is unlikely to have a significant impact on the company. In a statement Express Scripts released about the FTC settlement, the company noted that the rebate-free PBM model it announced in October aligns with the reforms stipulated in the agreement and the push for greater transparency.

As part of the agreement, Express Scripts said it would reshore its group purchasing organization, Ascent Health Services, from Switzerland to the U.S., reversing a move made in 2019.

The 340B Rebate Model Pilot Program that was supposed to launch on Jan. 1 has been relegated to the trash heap. Had the one-year pilot gone into effect, hospitals would have paid the full market price for selected drugs and then received reimbursement after the drugs had been administered and proper documentation had been submitted to manufacturers.

The American Hospital Association, the Maine Hospital Association, and four safety-net hospitals sought an injunction in tandem with a lawsuit filed on Dec. 1 to prevent the pilot from being implemented, and a federal judge granted a temporary restraining order on Dec. 29 blocking the Health Resources & Services Administration (HRSA) from proceeding with the program.

On Thursday, a U.S. District Court stated in a joint motion for vacatur and remand that the parties in the lawsuit agreed it “would not be fruitful” to proceed, and that it would “serve the best interests … to vacate the challenged actions.”

The motion stipulates that if HRSA wants to start a new 340B rebate program, the agency will issue a new notice and solicit new applications from drug manufacturers. Additionally, it will solicit comments prior to or at the same time as the new notice is issued and set the effective date for any new rebate program at least 90 days after publicly announcing the approval of any applications.

CommonSpirit Health will pay Tenet Healthcare approximately $1.9 billion over the next three years in a transaction that will once again give Tenet full ownership of its revenue cycle management subsidiary, Conifer Health Solutions. As part of the deal, Conifer will make a redemption payment of approximately $540 million to CommonSpirit “to address the elimination of CommonSpirit’s capital account and the redemption of CommonSpirit’s 23.8% equity stake in Conifer, retroactively effective January 1, 2026,” according to a press release.

Michael Browning, CommonSpirit’s chief financial officer, said, “CommonSpirit came together with Conifer and Tenet in this transaction to support our multiyear system integration strategy. Conifer has been a strong and reliable revenue cycle partner since 2012, bringing consistency to a previously fragmented environment in the former Catholic Health Initiatives portfolio. Conifer meaningfully contributed to these hospitals achieving 100% of their cash collection goals.” Conifer will continue to support CommonSpirit through the end of this year; the original 20-year contract would have ended in 2032.

Epic rolled out AI Charting, an ambient scribe feature of Art, the company’s AI tool for clinicians. AI Charting listens during patient visits, drafts notes, and suggests orders based on the conversation. Clinicians can use voice commands to personalize how the tool structures drafts, Epic noted in its announcement. Corey Miller, Epic’s vice president of research and development, told Healthcare Dive that the company intends to expand AI Charting beyond documentation, making it “an active assistant in the room.” He added, “This is really just the start for Art.”

While several competitors — including Oracle Health, the second-largest vendor of electronic health records in the U.S. — already offer AI-supported ambient scribes, Epic is expected to have an advantage because of its status as the leading EHR vendor. Among acute care hospitals, Epic’s share of the EHR market was approximately 42% in 2024, while Oracle’s was approximately 23%, according to Klas Research.

Penn Medicine now offers a virtual primary care service called Penn Medicine OnDemand through 63 affiliated practices in Pennsylvania and New Jersey. Patients can use the service to visit virtually with an experienced clinician when their usual provider’s office is closed. The Penn Medicine OnDemand team has access to patients’ records in PennChart, the health system’s EHR system, and can treat common illnesses such as colds and flu, headaches, and stomachaches. According to the announcement, Penn Medicine is the first health care provider in its service area to roll out this type of after-hours coverage, which eliminates the need for primary care providers to be on call nights and weekends.  

What we’re reading

Experts Mixed On How Most-Favored-Nation Drug Pricing Would Affect Prices, Access, And Innovation. Health Affairs, 2.4.26

The Growing Success of Medicare Drug-Price Negotiation. NEJM, 2.4.26 (subscription required)

How tumours trick the brain into shutting down cancer-fighting cells. Nature, 2.4.26

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