News weighs on stocks of companies offering alternatives and some smaller ones developing their own drugs
The U.S. Food and Drug Administration said Eli Lilly's diabetes and weight-loss drugs marketed as Zepbound and Mounjaro are no longer in shortage signaling that the company has succeeded in expanding manufacturing.
Rival Novo Nordisk's (NVO) (DK:NOVO.B) drugs, Ozempic and Wegovy, remain in shortage, however, according to the FDA's website.
The two companies are current leaders in the weight-loss category, which has proved highly popular with consumers. Both are trying to expand manufacturing capacity. Lilly (LLY) announced plans Wednesday to invest $4.5 billion in a new plant in Indiana that will produce new medicines and scale up manufacturing of existing medicines.
The Lilly news weighed heavily on the stock of Hims and Hers Health Inc. (HIMS), which was down 10% in premarket trade. That company was allowed under FDA rules to make its own version of the weight-loss drugs as long as there was a shortage and a patient need.
Read now: Novo Nordisk CEO spars with lawmakers over Ozempic, Wegovy prices
Some of the smaller companies developing rival weight-loss drugs were also lower Thursday. Viking Therapeutics Inc. (VKTX), which is working to develop an oral weight-loss drug-Lilly's and Novo's treatments are administered by injection-fell 1.1%.
See also: Obesity drugs in kindergarten? Novo Nordisk GLP-1 drug works for kids as young as 6, study finds.
Amgen Inc. (AMGN), which is currently in a Phase 2 trial of a treatment called MariTide, was down 0.3%. MariTide stands apart from competitors with potential monthly or even less frequent dosing, a factor that could help control the unpleasant gastrointestinal side effects that often come with weight-loss drugs, analysts said.
Scholar Rock Holding Corp. (SRRK), which is working on a treatment that helps preserve lean muscle that is often lost during rapid weight loss, was down 2%.
Lilly's stock has gained 53% in the year to date, while the S&P 500 SPX has gained 19.7%.
-Ciara Linnane
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