By Elsa Ohlen

Eli Lilly stock was rising in early trading Tuesday after it posted fresh data on its experimental weight-loss pill.

The pharma giant said the latest trial showed the medication resulted in up to 10.5% weight loss in overweight or obese patients with Type 2 diabetes in a late-stage trial. The firm continues to battle with rival Novo Nordisk for market share in the lucrative GLP-1 space.

Following the results, "we are moving with urgency toward global regulatory submissions to potentially meet the needs of patients who are waiting," said Kenneth Custer, president of Cardiometabolic Health in a statement Tuesday. "If approved, we are ready to offer a convenient, once-daily pill that can be scaled globally."

The data readout for the pill orforglipron comes less than three weeks after the drugmaker released results of a similar trial in patients with obesity or overweight without diabetes that didn't meet investors' expectations and sent shares falling 14% on the day. That study showed a mean body weight reduction of 12.4% over 72 weeks for patients on the highest dose, compared with patients on the placebo, who lost 0.9%.

In overweight patients with Type 2 diabetes, the once-daily pill resulted in a mean body weight reduction of 5.5% on the lowest dose, 7.8% on the medium dose, and 10.5% on the highest dose, all over the span of 72 weeks. Patients on the placebo lost 2.2%. Results also showed blood-sugar levels were reduced by between 1.3% and 1.8%.

Even if the latest results showed less pronounced weight reduction than in the previous trial, it isn't much of a concern for investors because obese and overweight people with diabetes often find it more challenging to lose weight.

Lilly stock rose 4.5% to $726.78, while the S&P 500 was flat. Novo's American depositary receipts dropped 2.7% to $54.83.

The results will be viewed as reassuring and more comparable with results from semaglutide, Novo's rival GLP-1 drug that it sells under the brand name Ozempic for diabetes and Wegovy for weight-loss, Cantor analyst Carter Gould wrote early Tuesday. Gould rates Lilly Overweight with a price target of $825.

Results will also ramp up the battle for market dominance with Novo, which in May submitted Wegovy in pill form to the Food and Drug Administration. A decision is expected on the medication in the fourth quarter.

There have been questions about orforlipron's side effects. For patients with diabetes, 10.6% of patients discontinued treatment due to side effects, compared with 4.6% who received a placebo. That is slightly more than the 10.3% of patients without diabetes who stopped treatment due to adverse events. The most common side effects were mild to moderate gastrointestinal-related problems, such as nausea, vomiting and diarrhea.

Lilly said the safety profile of orforglipron was consistent with injectable GLP-1 medicines such as its Mounjaro and Zepbound drugs. While the pill has shown less weight-loss than the jabs, it is expected that an oral version will be favored by consumers as well as easier to scale and expand worldwide -- partly because the pill doesn't have to be shipped cold as injectable versions.

However, with orforglipron showing less effectiveness in terms of weight-loss than expected, many investors saw it as putting rival Novo Nordisk back in the game. Novo has said its rival drug Wegovy has demonstrated an average of 16.6% weight-loss in pill form for obese or overweight patients without diabetes.

Coming into Tuesday, Lilly stock had declined 27% over the past 12 months. Novo ADRs had lost 58% over the same period.

Write to Elsa Ohlen at elsa.ohlen@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

August 26, 2025 12:07 ET (16:07 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.