Novo Nordisk (NVO) shares rallied on Tuesday after the U.S. FDA approved its Wegovy pill for weight management, marking a major milestone for the beleaguered obesity drugmaker and putting shares of its U.S. rival Eli Lilly (LLY) under pressure.
Following Monday’s approval, Shares of the Danish drugmaker closed 9% higher in Copenhagen, Denmark, bouncing back from a ~47% selloff YTD, while LLY traded flat, recovering some of its premarket losses.
While the Wegovy pill is expected to generate billions of dollars in peak sales, according to analysts, Lilly (LLY) is also not far behind in the race for a sizable portion of the highly promising market for oral weight loss drugs.
Leerink Partners analyst David Risinger projects that oral weight loss drugs, including the Wegovy pill and Lilly’s orforglipron, could ultimately make up roughly 25% of the total obesity-drug market, estimated at $150B.
The Wegovy pill outperforms
According to Seeking Alpha analyst Eugenio Catone, Novo’s (NVO) version, available as the first oral GLP-1 specifically indicated for weight management, has clearly outperformed orforglipron, which is currently awaiting FDA review.
LLY’s small molecule drug has delivered an average weight loss of about 12% over 72 weeks in a late-stage clinical trial, compared to approximately 17% of weight loss generated by Novo’s rival pill in about a year.
“Despite recent share gains, NVO stock trades at a 14x P/E ratio—well below its historical average—implying substantial upside from multiple reversion and growth catalysts,” Catone added, reaffirming his Buy rating on Novo (NVO).
First-mover advantage
However, in November, the FDA issued a National Priority Voucher for orforglipron, which could shorten its review timeline to just 1–2 months from the typical 10–12 months of a standard review, setting up a potential approval for the drug in early 2026.
LLY’s once-daily therapy, which is less costly to manufacture compared to the Wegovy pill, is expected to cost $149 per month for the lowest starting dose, The Wall Street Journal reported, citing LLY’s plans. Meanwhile, Novo (NVO) intends to launch the Wegovy pill in early January, with a similar price tag for the starting dose for cash-paying customers.
However, BMO Capital Markets analyst Evan Seigerman argued that NVO could benefit from the first-mover advantage. “While a major win for the company, the milestone highlights mounting work ahead in a rapidly evolving market with competitive assets in development and an orfoglipron approval just around the corner,” Seigerman added.