The obesity drug market, long divided between Novo Nordisk and Eli Lilly, is shifting toward Eli Lilly's dominance. Novo Nordisk's blockbuster products Wegovy and Ozempic are losing ground to Eli Lilly's Zepbound, and the Danish drugmaker is now reeling after clinical results for its highly anticipated new drug fell short of expectations.
According to the Financial Times, CNBC, and other international media outlets on Dec. 23, Novo Nordisk's shares plunged 16.5% after clinical trial data showed its upcoming obesity drug compound CagriSema underperformed against Eli Lilly's tirzepatide. The stock fell to its lowest level since June 2021, when Wegovy was launched. CagriSema achieved an average weight loss of 23% in an 84-week trial, falling short of tirzepatide's 25.5%.
Novo Nordisk, once a pioneer in obesity treatments, has struggled since last year. The company faces a triple threat: losing market share to Eli Lilly's aggressive pursuit, competition from cheaper generics, and drug price cuts in the United States. Novo Nordisk announced it expects net sales and profits to decline by up to 13% this year.
Meanwhile, late entrant Eli Lilly continues its aggressive advance. The company announced the same day that the FDA approved its multi-dose "KwikPen" product, which divides a month's supply into four separate doses. An oral obesity pill is scheduled for launch in April, raising expectations for further sales growth. Eli Lilly shares rose 4% on Dec. 23, moving in the opposite direction of Novo Nordisk. The company said sales are expected to grow approximately 25% this year, driven by strong demand for obesity treatments. Zepbound recorded 16.3 million prescriptions in the U.S. last year, surpassing Wegovy's 13.3 million for the first time.
Jefferies analyst Michael Leuchten said Novo Nordisk's new product faces "increasingly unclear commercial positioning" and suggested the company may pursue aggressive mergers and acquisitions to escape its crisis. He projected Novo Nordisk could spend up to $35 billion on M&A this year.