Novo Nordisk $NVO: Market Underestimates Stronger Weight-Loss Pipeline Against Eli Lilly $LLY

The weight-loss drug market, driven by the explosive growth of GLP-1 receptor agonists, remains a fiercely contested arena where Novo Nordisk ($NVO) and Eli Lilly ($LLY) hold dominant positions. Recent sentiment on social platforms suggests that Novo Nordisk’s stock has faced downward pressure due to perceptions of losing ground to Eli Lilly in this critical segment. However, a closer examination of pipeline strength, particularly in oral GLP-1 formulations, indicates that Novo Nordisk may still hold a competitive edge worth scrutinising.

Pipeline Strength: Oral GLP-1 as the Next Frontier

The development of oral GLP-1 therapies represents a significant evolution in the weight-loss drug market, offering patients a more convenient alternative to injectables. Novo Nordisk has made notable strides with its oral semaglutide, currently in Phase III trials, which has demonstrated a 17% weight reduction over 68 weeks in clinical results reported earlier this year. This compares favourably to Eli Lilly’s oral candidate, which achieved an 8% reduction over 40 weeks in its Phase III trial, as reported in mid-2025. While trial durations and endpoints differ, the raw efficacy data suggests Novo Nordisk’s formulation could appeal more strongly to prescribers and patients if these results hold in broader studies.

Beyond oral semaglutide, Novo Nordisk’s pipeline includes Amycretin, a next-generation oral weight-loss drug still in early-stage trials but showing promise with dual mechanism action. Eli Lilly, meanwhile, benefits from a time-to-market advantage with its oral candidate, potentially reaching commercialisation sooner. However, speed must be balanced against efficacy, and Novo Nordisk’s data so far indicates a potential for superior outcomes.

Injectable Portfolio: A Head-to-Head Battle

In the injectable segment, Eli Lilly’s Zepbound has gained traction with a reported 17% weight loss over 24 weeks in late-stage trials, outpacing Novo Nordisk’s Wegovy in some direct comparisons. Yet Novo Nordisk is not standing still. Its experimental Ubt251, which mimics multiple hormones including GLP-1, GIP, and GCG, achieved a 15% weight loss in just 12 weeks during early trials reported in Q2 2025. While Lilly’s retatrutide holds a lead in trial progression, the accelerated weight reduction seen with Ubt251 suggests Novo Nordisk could close the efficacy gap with further development.

Additionally, CagriSema, another Novo Nordisk candidate, is positioned as a direct rival to Zepbound, with Phase III data expected later in 2025. If successful, this could bolster Novo Nordisk’s portfolio and counter the narrative of falling behind.

Market Performance and Financial Metrics

Turning to financials, both companies have reported robust growth in their GLP-1 portfolios, though recent quarters show divergence. The table below captures key revenue figures for their weight-loss and diabetes drugs, reflecting data from Q1 2025 earnings reports.

Eli Lilly’s Zepbound has seen sharper year-on-year growth, reflecting strong market uptake and possibly contributing to the negative sentiment around Novo Nordisk’s stock. However, Novo Nordisk’s broader GLP-1 portfolio, including Ozempic, remains a cash cow with a 40% global market share in diabetes treatment as of Q1 2025. This diversified revenue base provides a buffer as the company advances its weight-loss pipeline.

Valuation and Market Sentiment

Valuation metrics further contextualise the market’s reaction. As of mid-2025, Novo Nordisk trades at a forward P/E ratio of approximately 15, significantly lower than Eli Lilly’s forward P/E of 22, based on consensus estimates from financial databases. This discount may reflect investor concerns over Novo Nordisk’s competitive positioning, but it also suggests potential upside if pipeline catalysts materialise. Posts on social platforms echo this divide, with some analysts arguing that the sell-off in Novo Nordisk’s stock is overdone given its pipeline depth and historical dominance in GLP-1 markets.

Competitive Landscape and Forward Implications

The GLP-1 market is not a zero-sum game, but capacity constraints and payer dynamics will influence which player gains the upper hand. Novo Nordisk’s manufacturing scale, honed over decades in insulin production, offers a structural advantage in meeting demand surges—a challenge Eli Lilly has faced with Zepbound supply shortages reported in early 2025. If Novo Nordisk can leverage this operational strength alongside pipeline advancements, the current market pessimism may prove short-lived.

Looking ahead, the weight-loss drug market is projected to exceed $100 billion annually by 2030, leaving room for both companies to thrive. However, investor focus will likely remain on clinical trial readouts over the next 12 months. Novo Nordisk’s oral semaglutide and Ubt251 results will be pivotal in reshaping sentiment, while Eli Lilly’s ability to maintain supply and commercial momentum with Zepbound will test its lead.

In conclusion, while Eli Lilly currently holds a commercial edge in the weight-loss segment, Novo Nordisk’s pipeline—particularly in oral formulations—presents a compelling case for sustained competitiveness. The market’s recent punishment of Novo Nordisk’s stock may overlook these underlying strengths, creating a potential mismatch between perception and fundamentals.

References

BMO Capital Markets. (2025, April 17). Eli Lilly overtaking Novo Nordisk in diabetes/obesity market. Fierce Pharma. Retrieved from https://www.fiercepharma.com/pharma/eli-lilly-overtaking-novo-nordisk-diabetesobesity-market-analysts

DelveInsight. (2025, March 17). Novo vs. Eli Lilly in Anti-Obesity Drug Market. Retrieved from https://www.delveinsight.com/blog/novo-vs-eli-lilly-in-anti-obesity-drug-market

Eli Lilly. (2025, May 8). Q1 2025 Earnings Report. Retrieved from https://investor.lilly.com/financial-information/quarterly-results

Novo Nordisk. (2025, May 2). Q1 2025 Earnings Report. Retrieved from https://www.novonordisk.com/investors/financial-reports.html

@thexcapitalist. (2025, July 14). Novo Nordisk dominating insulin and GLP-1 market, weight-loss pipeline stronger than Eli Lilly [Post]. X. Retrieved from https://x.com/thexcapitalist/status/recent-post