Shares of Danish pharmaceutical giant Novo Nordisk (NYSE: NVO) surged more than 6% on Thursday, driven by positive clinical trial results for an oral version of its popular weight loss drug, Wegovy. The study demonstrated that patients taking a daily 25 mg pill of oral Wegovy over 64 weeks achieved an average weight loss of 16.6%, with one-third of participants losing more than 20% of their body weight.
Unlike the injected form of Wegovy, which typically uses doses of 1.7 mg or 2.4 mg, the oral version requires a significantly higher dosage (25 mg) to achieve similar efficacy. Novo Nordisk explained that this is due to the high metabolic rate of the drug when processed by the liver after ingestion. Martin Holst Lange, the company’s chief scientific officer, emphasized that achieving injection-level weight loss without needles could be a major advantage for patients.
Despite Wegovy’s widespread recognition in the U.S., the company faces intensifying competition. American healthcare giant Eli Lilly’s rival injection, Zepbound, has gained rapid market share through aggressive marketing efforts. In the second quarter of this year, Zepbound’s sales reached $3.4 billion, surpassing Wegovy’s $3 billion for the first time. In response to competitive pressures, Novo Nordisk has lowered its full-year sales and operating profit growth forecasts and recently announced plans to cut approximately 9,000 jobs.
Currently, Novo Nordisk’s stock trades at a P/E ratio of around 15, with a dividend yield below 3% and an estimated annual growth rate of just 8% over the next five years. However, some analysts believe the current stock price does not fully reflect the clinical advantages and market potential of its products, suggesting that competitive risks may already be overpriced. The breakthrough in oral formulation could attract a broader consumer base and drive future sales and profit growth. If oral Wegovy successfully expands market reach and accelerates financial performance, the stock may regain investor favor.
While progress in oral weight loss drugs opens new market opportunities for Novo Nordisk, the company must still demonstrate its investment value through tangible sales growth. Market participants will closely monitor the drug’s regulatory approval process and commercial potential.
