Eli Lilly’s win in a head-to-head trial drove Novo Nordisk’s market cap to pre-Wegovy levels not long after the victor became the first pharma company to top a $1 trillion valuation. It seems one company can do no right, while the other can do no wrong.
The drama on display between obesity giants Eli Lilly and Novo Nordisk never disappoints. First, the American company became the first pharma ever to hit a $1 trillion market cap late last year. Then on Monday, its Danish rival continued its steep descent after a clinical loss in a head-to-head trial against none other than Lilly itself.
One company can do no wrong. The other can do no right. Watching the intense neck-and-neck race between the companies’ respective weight loss drugs, I’ll admit I did not predict these disparate trajectories even as I foresaw Lilly’s ultimate victory.
Novo had a two-year head start following Wegovy’s approval in June 2021, and the company even maintained its position for a while after Lilly’s Zepbound hit the market in November 2023. But last year revenues hit an inflection point, with Lilly officially overtaking Novo in GLP-1 sales.
The lead change may have happened sooner had the companies not been contending with shortages and, even after ample supply was restored, compounders. But it was inevitable that Lilly would surpass Novo in the end because Lilly has the more effective drug. When Lilly pitted the two GLP-1 drugs against each other last year, Zepbound beat Wegovy handily. Safety was comparable, but patients taking Zepbound lost 47% more weight.
But Novo had a secret weapon—or so it thought—in CagriSema, which is expected to launch later this year as the first amylin-based drug for obesity. If Wegovy couldn’t outperform Zepound, maybe CagriSema would. Novo announced it would perform a head-to-head study in November 2023, just a week after Zepbound got the FDA greenlight.
Not only did that bet not pay off, it was the final straw in a descent that erased all of the market gains that Wegovy brought. Following Monday’s news, Novo’s market cap has officially fallen below $200 billion—a place the Big Pharma has not been since before Wegovy’s approval. At one point Novo was valued at more than $650 billion.
That is a stunning fall from grace for the maker of the first-ever GLP-1 weight loss drug. And it’s even more stunning to watch while Lilly rises higher and higher. Also starting 2021 at less than $200 billion, Lilly showed strong growth to a nearly $1 trillion valuation in mid-2024. The company’s stock faced some volatility over the rest of that year and into 2025 as the entire biopharma industry weathered tariff threats and drug pricing pressure, but ultimately passed that historic $1 trillion mark late last year.
And of course Lilly isn’t resting on its laurels with Zepbound. It, too, is pursuing next-generation options for obesity, starting with the oral option orforglipron, which is currently awaiting an imminent FDA decision. Although it’s not first-to-market in the oral category—that accolade once again goes to Novo with its late December approval for oral Wegovy—it will be the first non-peptide weight loss drug, which is easier to manufacture. Lilly has already stocked $1.5 billion worth of orforglipron ahead of the launch.
On the other hand, Novo CEO Maziar Mike Doustdar pointed to the very fact that oral Wegovy is a peptide as its advantage. “It’s the first and the best-in-class pill that you will see for a very, very long time to come,” he said on a conference call Monday. “It’s the only pill that’s a peptide. All the other stuff is small molecules, so they have the small molecule efficacy.” And more to the matter at hand on the call, Doustdar insisted that this week’s trial readout was not a nail in the coffin for CagriSema or Novo’s presence in the obesity space.
Nevertheless, the news certainly did nothing to change the narrative that had already solidified by the J.P. Morgan Healthcare conference last month: Lilly will maintain its dominance as the obesity market enters a new era. Meanwhile, Novo faces yet another stumble on a difficult descent.
