Eli Lilly (LLY) has enjoyed a successful run the past several quarters as the company’s blockbuster GLP-1 weight-loss drug Wegovy gains steam in the obesity space.
But Wall Street wiped out more than $90 billion in the company’s market cap during trading Thursday after competitor Novo Nordisk (NVO) locked in a deal to have its GLP-1 listed on CVS’s (CVS) formulary as the preferred weight-loss drug for patients.
Wegovy was first to market but has been losing ground to Eli Lilly’s Zepbound in recent months, according to the latest prescription data.
This month, Novo Nordisk has been busy securing deals to provide more access and visibility for Wegovy. It has announced deals with telehealth companies like Hims & Hers (HIMS), specialty pharmacy deals like the one with Humana’s (HUM) CenterWell, as well as Thursday’s CVS deal.
Read more about Eli Lilly’s stock moves and today’s market action.
But Eli Lilly CEO David Ricks waved off the deal Thursday, telling Yahoo Finance in an interview that the company is focused more on upcoming obesity drugs in its pipeline and sees exclusive deals as an older way of doing business.
“We’re not interested in exclusive deals. We think innovation and choice is very important. And we’re well into the product replacement cycle, and there’s more coming,” Ricks said, referring to the highly anticipated oral form of Eli Lilly’s GLP-1 orforglipron, which is expected to hit the markets mid-next year.
“It’s in some ways a little disappointing to see this. It feels a little bit like last decade, these sort of lock-up deals,” Ricks added.
Ricks said he is confident in Zepbound’s product profile and the consumer preference reflected in the weekly prescription data.
“We’ll see if it performs. I mean, they’re going to have to switch people off the market-leading product onto an inferior product. And that’s hard to do,” Ricks said of the CVS deal.
He also noted that the company’s direct-to-consumer platform, which ties in telehealth providers to help give patients a chance to buy Zepbound directly from Eli Lilly, was doing better than expected — but declined to provide numbers.
“We built this not really for this purpose, we built this more as a backstop, based on the overall condition of retail pharmacy,” Ricks said, referring to store closures across the country in the past few years.
But Ricks isn’t focused on that. He said he has to stay focused on the company’s future rather than single-day stock moves.
