Obesity Drug Giants Brace for Trump Price Talks Impact

As heavyweight drug makers Eli Lilly and Novo Nordisk prepare to unveil third-quarter earnings, investors turn their gaze towards negotiations with U.S. President Donald Trump concerning drug pricing. Lilly holds an advantage over Danish competitor Novo in weathering potential U.S. price cuts, thanks to robust trial data, strategic ties with the White House, and a strong direct-to-consumer market presence. Conversely, Novo struggles with internal restructuring and aims to fortify its U.S. team.

BMO Capital analyst Evan Seigerman notes that Novo's situation remains unchanged, offering little encouragement to investors. Analysts predict Lilly's results on Thursday will align with expectations, with sales projected to grow 40% from last year to $16 billion, according to LSEG data. Novo, reporting earnings on November 5, is expected to see an 8% revenue growth to 77.4 billion Danish crowns.

Lilly's shares have risen 6.2% this year, while Novo's have declined about 46%. Despite CVS Health opting for Novo's Wegovy over Lilly's Zepbound, prescription data indicates Zepbound's market share remains strong. Lilly's diverse drug pipeline and strategic financial planning bolster investor confidence as negotiations with Trump continue.