Key Takeways

U.S.-listed shares of Novo Nordisk ( NVO ) plunged 7% in intraday trading Thursday after rival Eli Lilly ( LLY ) reported positive oral weight-loss drug news and BMO cut its rating for the Danish drug developer.

Eli Lilly on Thursday released Phase 3 trial results for its oral weight-loss drug that "demonstrated statistically significant efficacy results and a safety profile consistent with injectable GLP-1 medicines."

BMO downgraded its rating on Novo Nordisk's stock to "market perform" from " outperform " and slashed its price target to $64 from $105. The firm said it believes "obesity competitor Lilly has made sizable advancements in its commercial and clinical portfolio, causing it to overtake Novo's early lead."

Lilly Weight-Loss Drug Updates Seen Likely to Pressure Novo Nordisk Stock

"Key updates from Lilly's oral GLP1, orforglipron, are likely to pressure shares, only to be compounded by what we believe to be a softer 1Q," BMO analysts wrote.

Novo Nordisk, which produces blockbuster drugs Ozempic and Wegovy, has been in a neck-and-neck race to lead the weight-loss drug market against Mounjaro and Zepbound maker Lilly. Novo Nordisk's shares have lost more than half their value in the past 12 months.

Eli Lilly shares rose 16% in intraday trading to lead S&P 500 gainers. They had been slightly negative for the past year through Wednesday.

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