WSJ What’s News - What’s News in Earnings: Who Is Winning the Obesity-Drug Arms Race?

Episode Date: November 4, 2025

Bonus Episode for Nov. 4. The weight-loss-drug arms race is only heating up, as Novo Nordisk attempts to snatch drugmaker Metsera away from Pfizer. But can either company compete with Zepbound seller Eli Lilly? WSJ reporter Peter Loftus discusses what earnings from Big Pharma, including AbbVie, Bristol Myers Squibb and Merck, say about the future of the industry and how companies are responding to President Trump’s drug-pricing plans, including TrumpRx. WSJ Heard on the Street columnist David Wainer hosts this special bonus episode of What's News in Earnings, where we dig into companies’ earnings reports and analyst calls to find out what’s going on under the hood of the American economy. Sign up for the WSJ's free Markets A.M. newsletter. Further Reading: Novo Nordisk Sweetens Offer for Metsera - WSJ Pfizer Sues Seeking to Block Novo Nordisk’s Effort to Undo Weight-Loss Drug Deal Why Pfizer Can Still Prevail in the Obesity Fight With Novo Nordisk The Day Pharma’s Weight-Loss Gold Rush Intensified Pfizer Profit Falls Amid Lower Covid-19 Drug Demand Novo Nordisk Seeks to Outmuscle Pfizer With $9 Billion Bid for Metsera Novo Nordisk to Shake Up Board After Obesity-Market Challenges Mounjaro Powers Eli Lilly to Bumper Quarter of Earnings AbbVie Lifts Profit Outlook as Sales Rise Bristol Myers Squibb Profit Soars, Raises Revenue Guidance Merck Profit Rises on Strong Keytruda Demand GSK Lifts Guidance After Specialty Medicines Boost Sales Novartis Expects to Ride Out Patent Losses With Sales, Profit Growth Ahead Biogen Cuts Full-Year Earnings Guidance, Despite Third-Quarter Profit Rise J&J Lifts Full-Year Sales Outlook, Fueled by Pharma, Med-Device Gains Learn more about your ad choices. Visit megaphone.fm/adchoices

This podcast is brought to you by Dinotrace, the leader in AI-powered observability, with analytics, automation, and next-level intelligence on one unified platform. DynaTrace delivers the visibility and real-time insights you need to deliver better, more secure software, successful AI initiatives, and innovation at the speed of business. Turn data into decisions that drive your business forward with AI-powered observability where it counts. Learn more at dinatrace.com slash WSJ. That's www.d-d-D-Y-N-T-R-A-C-E dot com slash WSJ. Hey listeners, it's Tuesday, November 4th.

I'm David Wainer for the Wall Street Journal, and this is What's News in Earnings, our look at some of the biggest themes standing out this earning season. In the farmer world, there's Eli Lilly, and then there's pretty much everyone else. Lily's weight-loss powerhouse continues to reshape the industry, with sales of its GLP1 drugs like Zepbound soaring and rivals scrambling to respond. In the latest twist, and the sign of just how fears, the new obesity drug arms race has become. The maker of Ozempic, Novo Nordisk,

is now trying to snatch away another company in the space, Metzera, from Pfizer. At the same time, farmers' negotiations with President Trump over drug prices and import tariffs are hanging over the sector, testing how companies will deliver growth, even as blockbusters like Ketrudev from Merck, edged-thwart patent expiration, while others, like Humira from Abbe, already have.

We're joined by Wall Street Journal reporter Peter Loftus, who's been tracking pharma for us. Peter, there's a lot of hype baked into this whole GLP1 boom. What did we learn from Eli Lilly's earnings last week? Is this a sustainable growth story, or are we in kind of a bubble? Well, we learned from Eli Lilly that when you have a couple of drugs that are in demand because they're so effective for weight loss and diabetes, and when you resolve some supply issues, as Eli Lilly has done, that you can basically print money.

Their drug for diabetes, Monjaro, sales more than doubled, and it's on track to become the highest selling drug in the world. Zepbound, which is basically the same drug, that nearly tripled in sales. And together, they've generated billions of dollars in sales. We learned with Eli Lilly's most recent earnings report that this booming growth is not confined. to the U.S. Manjaro, it's rolling out to more countries, and much of the demand for it is from people who are willing to pay out of pocket for it in these other countries. If that keeps up, the market's just going to get bigger and bigger.

As far as how much of this is sustainable, that's the million-dollar question. As these drugs roll out to more and more people, there's going to be more and more pricing pressure that moderates the overall sales growth. Just as Eli Lilly was reporting earnings, Novo Nordisk was coming in with a out of nowhere aggressive bid to essentially snatch away Metzara from Pfizer. What is going on here? What is Pfizer doing to respond? Pfizer is not sitting back and taking this. They've already filed a couple legal moves to try to force Metzara to honor the terms of their original merger agreement. and it's turned into this juicy or contentious takeover battle that we haven't seen in biopharma for a while. It's interesting that Pfizer, in its recent press release, flagged the fact that Nova was trying to snatch away this acquisition from an American company.

And Albert Borla, Pfizer's CEO, was the first one to stand in the White House alongside President Trump and announced a deal on the drug pricing plan. What do you make of the stage we're in now with the drug pricing discussions and the tariffs? The Pfizer deal in September led to a lot of relief in the sense that while on its face it looked like Pfizer was making a lot of concessions on prices in the U.S., when you look at the details, the impact is more limited in scope than it might seem. So it's limited to reduce prices in Medicaid where most companies already sell at a discount. And through this direct purchase model, including Trump RX, investors and analysts see that. that as having less of an impact that it might seem, that there'd be a small audience for that way of buying. And a couple more companies have followed with their own announcements. And there's the expectation that eventually more will directly. It's led to increases in these companies' stock

prices. Companies seem to be getting protection from any new tariffs down the line. And we'll see over time whether some of these discounts do add up to a big impact, at least for certain companies. Yeah, we're still waiting for Eli Lilly, for instance, the best performing company. Have they mentioned anything during their earnings call, or are they going to roll out some heavily discounted Zepbound or Manjaro? Lily and other companies during their earnings calls have at least alluded to still being in discussions with the administration on these kinds of deals. They haven't been so specific in tipping their hand about what elements they're going to agree to, there's a general expectation that they're going to make similar concessions

to what Pfizer and AstraZeneca have done in exchange for protection from tariffs. Now, besides the whole GOP1, boom, weight loss is such a massive category in farming. There are tons of other very important categories that are driving earnings and affecting big shares like Merck, AbbVee, many of which are facing patent cliffs. their drugs either lost patent exclusivity recently or will. How are some of these companies preparing for life after patent exclusivity goes down for some of their major drugs? Some of the companies have become more aggressive in dealmaking.

They've been making decent size acquisitions. And they're basically looking for drugs developed by other people to restock the pipeline or even drugs that are already on the market that can generate the sales that will hopefully offset and even exceed maybe the sales lost from their current blockbusters when they face patent expirations. So acquisitions are a big way they're doing it, even just continued in-house R&D, introducing new drugs that treat some of the similar conditions to the older ones that lost patent protection, like with ABV. They have a newer drug called Sky Rizzi that's on the rise, and they see that as a way to really cushion the impact of losing patent.

protection for Humira and just had booming sales this past quarter. Some of companies have cut costs to get ready for this patent cliff like Bristol Myers and Merck. And so there's a variety of ways that they're all trying to weather this patent cliff. We'll see in the coming years who has the right strategy. Thanks for joining, Peter. This has been a great conversation. My pleasure. I enjoyed it. And that was What's News and Earnings. Today's show was produced by Zoe Colkin and Michael LaValle with Deputy Editor Chris Zinsley.

Later today, we'll have the PM edition of What's News Out for You as usual. And we'll be back later this earning season, diving into another industry. Until then, I'm David Wainer. Have a great day.