Key Takeaways:
Novo Nordisk shares have climbed 35 percent from a March low as its Wegovy pill holds its lead over Eli Lilly's Foundayo.
"Novo is a different Novo today than a year ago," Morten Gregersen, chief portfolio manager at Danish asset manager Formuepleje, a Novo shareholder, said. "They're much more consumer-oriented and they've become much more aggressive."
Recent IQVIA prescription data suggests demand for oral Wegovy remains stronger than analysts initially expected and well above Lilly's Foundayo, although Barclays noted the figures understate total Foundayo demand because they exclude certain distribution channels.
The pair are battling for dominance in an obesity drug market analysts expect to be worth more than $100 billion in the United States alone by the end of the decade. Both report second-quarter results on August 5.
Analysts and shareholders will look for clues that Novo's turnaround is durable when it reports second-quarter results on August 5, and that it can keep pace with Lilly over the longer term. The U.S. drugmaker reports the same day, with analysts broadly expecting strong sales of its blockbuster weight-loss and diabetes injections, Mounjaro and Zepbound.
Novo spent 2025 on the defensive as mounting U.S. pricing pressure and competition led to four guidance cuts and wiped billions from its market value. The company replaced its CEO and launched a restructuring that cut 9,000 jobs. This year it has regained momentum with oral Wegovy, launched in the United States in January, which reached more than 1 million patients and generated $2.26 billion in its first full quarter.
The pill, however, has yet to alter the broader picture. After overtaking Wegovy injections last year, Lilly's Zepbound has maintained a commanding lead in the U.S. market, with weekly prescriptions more than double those of Novo's drug in recent months. Lilly raised its 2026 guidance to $82 billion to $85 billion after first-quarter revenue grew 55.55 percent, with Mounjaro up 125 percent to $8.66 billion and Zepbound up 80 percent to $4.16 billion. Novo, by contrast, guided to an adjusted sales decline of 4 percent to 12 percent at constant currency.
Novo's ability to broaden beyond obesity and diabetes is also under scrutiny after a heart disease drug trial failed on July 31. The company has pre-announced list price cuts of roughly 50 percent for Wegovy and 35 percent for Ozempic effective January 1, 2027, protecting volume but capping future cash flow.
The rivalry has spilled into the courts. Last month, Novo sued Lilly in a U.S. federal court, accusing it of false advertising for using efficacy comparisons that omit its newer, higher-dose Wegovy. Lilly has denied the allegations. BMO analyst Evan Seigerman said Novo was being more aggressive and trying to "make some noise," even if the suit was unlikely to make a huge difference.
"One of the concerns had been that orforglipron from Lilly was going to come along and make things a lot tougher for oral Wegovy," Barclays analyst James Gordon said, using the generic name for Foundayo. "But so far... orforglipron doesn't really seem to have impacted the product."
Analysts said Novo could edge up its full-year outlook, though the main positive may be a lack of crisis. "Even if there is no guidance raise, it will be comforting to know that the company has left the era of profit warnings," said Markus Manns, portfolio manager at Union Investment. The August 5 results will show whether Novo's comeback is durable or a reprieve before generic competition arrives in 2027.
This article is for informational purposes only and does not constitute investment advice.
