The past year has been challenging for Danish pharmaceutical giant Novo Nordisk (NVO). The company recently released disappointing fourth-quarter earnings and provided a more pessimistic outlook for fiscal year 2026, causing its stock price to drop nearly 15%. However, in its core weight-loss drug market, Novo Nordisk just received a positive signal from its biggest competitor, Eli Lilly (LLY).
Currently, the leading anti-obesity medications on the market, such as Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound, are administered as once-weekly subcutaneous injections. This route of administration has inherent inconveniences: many patients have a fear of needles, which leads a portion of the population to avoid such therapies. Furthermore, compared to oral tablets, injectable drugs have stricter storage requirements. Although they can be kept at room temperature for short periods, they typically require refrigeration and cannot be frozen, which undoubtedly adds complexity for patients who frequently travel.
For this reason, Novo Nordisk’s launch of an oral formulation of Wegovy is seen as a significant advancement. Based on current feedback, this move is already showing initial success. Prescription volumes for oral Wegovy are growing rapidly, but more crucial is the underlying structure of its market performance. When discussing oral Wegovy, Eli Lilly Executive Vice President Kenneth Custer noted that these new prescriptions largely appear to be for patients newly initiating treatment. This suggests that the oral formulation is not merely cannibalizing market share from the original injectable version, but is genuinely expanding the overall weight-loss market.
What does this mean for Novo Nordisk? Despite the strong start for oral Wegovy and its potential to expand the market, Novo Nordisk itself expects its overall sales in 2026 to decline due to multiple factors, including intense market competition and government-led drug price negotiations. While oral Wegovy can provide some support, it is not yet enough to reverse the trend.
Custer further pointed out that the current performance of oral Wegovy is also a positive sign for Eli Lilly. Lilly is actively advancing the approval process for its own oral GLP-1 drug, orforglipron. The successful market development by the oral version of Wegovy signals a promising future for the broad oral weight-loss drug category, paving the way for subsequent similar products, including orforglipron.
Regarding the outlook for Novo Nordisk’s stock price, analysts believe that its future rebound momentum will likely come from next-generation innovative drugs. The company is currently awaiting approval for its highly anticipated next-generation weight-loss and diabetes treatment, CagriSema. Additionally, Novo Nordisk’s pipeline includes several other weight-loss drug candidates in Phase 2 or Phase 3 clinical trials, such as amycretin, which has already entered Phase 3 trials. As progress is made in the development of these high-potential drugs, Novo Nordisk’s stock price is expected to rebound. With the current stock price hitting a 52-week low, it may present a noteworthy window of opportunity for long-term investors.
