Novo Nordisk Faces Market Pressure as Rival’s Weight Loss Drug Outperforms

COPENHAGEN, Denmark — Novo Nordisk, a global leader in cardiometabolic drugs, is facing significant market challenges as its weight loss drug Wegovy is outperformed by Eli Lilly‘s Zepbound in a recent clinical trial. Despite a 109% revenue growth over the past five years, Novo Nordisk’s shares have dropped by more than 20% in the last 12 months, raising concerns among investors.

Novo Nordisk’s trailing-12-month revenue reached $39.3 billion, driven by its portfolio of drugs for diabetes and obesity. However, the company’s future growth hinges on the performance of Wegovy, which currently holds a 73% share of the global anti-obesity medicine market. This includes older drugs alongside Wegovy.

Eli Lilly’s Zepbound, however, has shown superior efficacy in a phase 3b clinical trial. Over 72 weeks, patients on Zepbound lost an average of 20.2% of their body weight, compared to 13.7% for those on Wegovy. Zepbound also outperformed Wegovy on all five secondary endpoints, including waist circumference reduction.

Despite these results, Novo Nordisk is not expected to lose significant market share immediately. Both companies are struggling with manufacturing shortages, limiting the availability of their drugs. Novo Nordisk is investing heavily in expanding its manufacturing capabilities to meet demand.

“There is still plenty of growth on the way,” said an industry analyst. “Novo Nordisk will continue to make billions from Wegovy, even if Zepbound is more effective. The demand for weight loss medications is colossal, and supply constraints will prevent a sudden shift in market share.”

However, the competitive landscape is shifting. Novo Nordisk’s long-term performance is no longer assured, and the company faces pressure to innovate. Its pipeline programs, aimed at developing even better weight loss medicines, will be crucial in maintaining its market position.

Investors are advised to approach Novo Nordisk with caution. While the stock still offers growth potential, its long-term outlook is uncertain. The company’s ability to adapt to the evolving market will determine its future success.