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

Summary

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

Date: November 4, 2025
Host: David Wehner
Guest: Peter Loftus (WSJ Pharma Reporter)

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Episode Overview

This episode dives into the evolving landscape of the pharmaceutical industry, spotlighting the transformative impact of GLP-1 weight loss drugs like Mounjaro and Zepbound. As Eli Lilly surges ahead with record-breaking earnings, competitors scramble to respond—most notably, Novo Nordisk and Pfizer are engaged in a dramatic acquisition fight. The discussion extends to how traditional pharmaceutical giants are coping with looming patent expirations, and what the latest moves in drug pricing and tariffs under President Trump mean for the industry’s future.

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Key Discussion Points & Insights

1. Eli Lilly’s Dominance in Weight Loss Drugs

• Unprecedented Sales Growth:
  • Eli Lilly's GLP-1 drugs, especially Mounjaro and Zepbound, are driving explosive growth.
  • Peter Loftus [01:46]: “When you have a couple of drugs that are in demand because they're so effective for weight loss and diabetes…you can basically print money."
• Resolving Supply Issues: Supply constraints have been mitigated, further fueling growth.
• Global Reach Beyond the U.S.:
  • International rollout is robust, with growing demand from patients paying out-of-pocket.
  • Peter Loftus [02:32]: “Much of the demand...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.”
• Sustainability Questions:
  • Concerns arise about how long this boom can last as broader access could introduce pricing pressure.
  • Peter Loftus [02:48]: "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.”

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2. Rivalry & M&A Drama: Novo Nordisk vs. Pfizer

• Takeover Battle:
  • Novo Nordisk has made an aggressive, unexpected bid to acquire Matsera from Pfizer.
  • David Wehner [02:55]: “Just as Eli Lilly was reporting earnings, Novo Nordisk was coming in with an out-of-nowhere aggressive bid…”
• Pfizer’s Response:
  • Legal action underway by Pfizer to enforce its original merger terms with Matsera.
  • Peter Loftus [03:10]: “They’ve already filed a couple legal moves...turned into this juicy or contentious takeover battle…”
• National Sentiment in Pharma M&A:
  • Pfizer publicly flags Novo’s bid as a foreign (non-American) threat.
  • CEO Albert Bourla’s relationship with the White House and prior drug-pricing deal becomes part of the narrative.

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3. Drug Pricing and Tariff Negotiations with the Administration

• Recent Deals and Limited Scope:
  • September’s Pfizer–White House agreement offered relief, with concessions mainly affecting Medicaid rather than the broader market.
  • Peter Loftus [03:51]: “It’s limited to reduced prices in Medicaid, where most companies already sell at a discount...less of an impact than it might seem.”
• Tariff Protections:
  • Companies hope for protection from new tariffs by making limited pricing concessions.
• Market Reactions:
  • Stock prices have risen as details signal limited overall revenue impact for pharma.

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4. Patent Expirations – The ‘Patent Cliff’ Challenge

• Major Drugs Facing Expiry:
  • Blockbusters such as Merck’s Keytruda and AbbVie’s Humira are losing or have lost patent exclusivity, jeopardizing future revenue.
• Coping Strategies:
  • Acquisitions: Pharma giants are purchasing other companies or new drugs to offset anticipated losses.
  • In-House R&D: Development of new drugs targeting similar conditions, e.g., AbbVie betting on Skyrizi as Humira’s replacement.
  • Cost-Cutting: Companies like Bristol Myers and Merck are reducing expenses to buffer against revenue decline.
  • Peter Loftus [05:56]: “Acquisitions are a big way they're doing it...Introducing new drugs that treat some of the similar conditions to the older ones that lost patent protection...Some companies have cut costs to get ready for this patent cliff...”

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5. Looking Forward – Industry Uncertainty and Resilience

• Unsolved Questions:
  • Whether the GLP-1-driven revenue surge will be sustained or diminished by price pressures and competitive dynamics.
• Winners to Watch:
  • All eyes on how Eli Lilly, Novo Nordisk, Pfizer, and legacy giants like Merck and AbbVie navigate the complex mix of new drug development, pricing politics, and global expansion.

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Notable Quotes & Memorable Moments

• Peter Loftus on Lily’s Market Power [01:46]:

  “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.”

• On Out-of-Pocket Growth Abroad [02:32]:

  “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.”

• On Market Realities of Price Concessions [03:51]:

  “The impact is more limited in scope than it might seem…through this direct purchase model, including Trump rx, investors and analysts see that as having less of an impact than it might seem.”

• On Threats and Change [05:56]:

  “Acquisitions are a big way they’re doing it...Some 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.”

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Timestamps for Key Segments

• 00:33 – Earnings season opening: Eli Lilly sets the pace
• 01:46 – Eli Lilly’s explosive sales & global GLP-1 growth
• 02:55 – Novo Nordisk’s surprise bid, Pfizer’s legal response
• 03:51 – Drug pricing negotiations, tariffs, and market implications
• 05:29 – Patent cliffs: how pharma giants strategize for post-exclusivity
• 07:01 – Wrap-up and reflections

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Tone and Language

The episode maintains the WSJ’s clear, analytical, and slightly urgent tone, reflecting the high stakes and rapid developments in the pharmaceutical industry. Comments are factual but often laced with a sense of drama, especially regarding high-profile corporate maneuvering and the “arms race” for market-defining drugs.

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A must-listen episode for investors, industry watchers, and anyone interested in how a few revolutionary drugs can reshape a sector—and the battles raging to control the profits and risks that come with them.

Transcript

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[David Wehner]

Hey listeners, it's Tuesday, November 4th. I'm David Wehner for the Wall Street Journal, and this is what's News in Earnings. Our look at some of the biggest themes standing out this earnings season in the pharma world. There's Eli Lilly, and then there's pretty much everyone else. Lilly's weight loss powerhouse continues to reshape the industry, with sales of its GLP1 drugs like Zepbound soaring and rivals scrambling to respond to in the latest twist and the sign of just how fierce the new obesity drug arms race has become, the maker of Ozempic, Novo Nordisk, is now trying to snatch away another company in this space, Matsera from Pfizer. At the same time, Pharma's 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 Keytruda from Merck edged toward patent expiration, while others like Humira from Abbvie 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?

[Peter Loftus]

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, Mounjaro, 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 US Mounjaro. 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.

[David Wehner]

Just as Eli Lilly was reporting earnings, Novo Nordisk was coming in with a out of nowhere aggressive bid to essentially snatch away MTSERA from Pfizer. What is going on here? What is Pfizer doing to respond?

[Peter Loftus]

Pfizer is not sitting back and taking this. They've already filed a couple legal moves to try to force Metsehra 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.

[David Wehner]

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 Bourle, 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?

[Peter Loftus]

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 US when you look at the details, the impact is more limited in scope than it might seem. So it's limited to reduced 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 as having less of an impact than 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.

[David Wehner]

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 Zeppelin or Manjaro?

[Peter Loftus]

Lilly 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.

[David Wehner]

Now, Besides the whole GLP1 boom, weight loss is such a massive category in pharma. There are tons of other very important categories that are driving earnings and affecting big shares like Merck, abbvie, 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?

[Peter Loftus]

Some of the companies have become more aggressive in deal making. They've been making decent sized 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 and D, introducing new drugs that treat some of the similar conditions to the older ones that lost patent protection. Like with Abbvie. They have a newer drug called Skyrizi 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 patten cliff. We'll see in the coming years who has the right strategy.

[David Wehner]

Thanks for joining, Peter. This has been a great conversation.

[Peter Loftus]

My pleasure. I enjoyed it.

[David Wehner]

And that was what's news in earnings. Today's show was produced by Zoe Kulkin and Michael Laval with deputy editor Chris Zinsley. Later today we'll have the PM edition of what's News out for your as usual. And we'll be back later this earnings season diving into another industry. Until then, I'm David Wehner. Have a great day.

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