Novo Nordisk A/S (NYSE:NVO) was at the center of media coverage as it sued rival weight loss drug manufacturer Eli Lilly on Tuesday. The firm claimed that Lilly had run misleading advertisements about its weight loss drug when it came to touting their superior performance over Novo Nordisk A/S (NYSE:NVO)’s products. It claimed that Lilly had relied on outdated trials and misleading information about its doses in order to boost the efficacy claims of its drugs. However, Lilly retorted by claiming that not only were its trials set up through a robust process, but it would also defend itself “vigorously” against Novo Nordisk A/S (NYSE:NVO)’s lawsuit. Cramer, who is a longtime fan of Lilly, wants Novo Nordisk A/S (NYSE:NVO) to compete in the market instead of in courts, as he commented on Tuesday:
“Why don’t you try to win Novo Nordisk instead of going to court?
“Look. . .they started it, they had the franchise. And yet somehow, David Ricks at Lilly has just done incredible things. Now I will say, I happen to like the guy who’s at Novo. It’s not his fault. He was not the guy who blew it. And these claims are very difficult. Doudstar was on the show multiple times. . .I think he’s a very good guy from Novo. But you know, there’s a bigger issue than misleading ads. I mean these are drugs that are really good and we’ll suss it out. Maybe Lilly has to, I know that Lilly’s going to be down today but that’s an opportunity as well…”
The CNBC TV host hasn’t held back on his praise for Eli Lilly and Company (NYSE:LLY) for more than a year. Among the reasons that he has praised the firm are its manufacturing presence and a diverse drug portfolio that extends beyond weight loss drugs. For instance, in his June 12th appearance on Mad Money, the CNBC TV host reiterated the host of reasons why he likes Eli Lilly and Company (NYSE:LLY):
“I don’t know if they’re going to split it, but I gotta tell you, the earnings are coming through. The drugs are coming through. They’ve got momentum. They’ve got build-out of a lot of different factories so they can produce all the GLP-1s… Huge position for my Charitable Trust. I want you to stay in the stock. I think it’s a really good one.”
The market, it seems, agrees with Cramer. While Novo Nordisk A/S (NYSE:NVO)’s shares are down by 31% over the past year and 6.9% year-to-date, Eli Lilly and Company (NYSE:LLY)’s stock is up by 48.5% over the past year and 10.7% year-to-date. The difference in the two firms is also evident in investment bank coverage. For instance, Goldman Sachs significantly slashed the share price target to DKK260 from DKK400 in March based on weaker estimates for Novo Nordisk A/S (NYSE:NVO)’s CagriSema drug. On the flip side, Citi raised Novo Nordisk A/S (NYSE:NVO)’s share price target to $1,600 from $1,500 and kept a Buy rating on the stock on the back of optimism for its weight loss, diabetes and other drug franchises.