Is Novo Nordisk’s Dominance Safe Against Eli Lilly?

The weight-loss drug market has exploded into one of the fastest-growing markets in recent years. Novo Nordisk (NVO) has cemented itself as the leader in the booming weight-loss drug market with blockbuster treatments like Wegovy and Ozempic. However, Eli Lilly (LLY), armed with fast-rising competitors Mounjaro and Zepbound, is mounting a serious challenge. As both companies race to capture a market projected to be worth $381.5 billion by 2033, the battle for dominance is intensifying. Let’s find out whether Novo’s lead is truly secure.

Valued at $685.7 billion, Eli Lilly is a global pharmaceutical company that has gained enormous popularity for its treatments for diabetes and obesity. However, the company also focuses on discovering, developing, and marketing medications across various therapeutic areas, including oncology, immunology, and neuroscience.

LLY stock has dipped 6.2% year-to-date, compared to the S&P 500 Index’s ($SPX) gain of 13.3%.

In May, Eli Lilly announced the results of its Phase 3b SURMOUNT-5 trial, wherein Zepbound (tirzepatide) outperformed Novo Nordisk’s Wegovy (semaglutide) in helping adults with obesity or overweight achieve significant weight loss. Over 72 weeks, participants on Zepbound lost an average of 20.2% of their body weight compared to 13.7% on Wegovy, a 47% greater relative reduction. Zepbound also outperformed on all critical secondary endpoints, cementing its place as the top treatment option in the obesity drug market.

In the second quarter, Mounjaro posted $5.2 billion in global sales, while Zepbound contributed $3.4 billion and retained leadership in branded anti-obesity medicines with two-thirds of total market patients. Notably, Mounjaro became the U.S. market leader in total type 2 diabetes incretin prescriptions, further strengthening its dominance. This led to a 38% increase in total revenue and a 61% growth in adjusted earnings in Q2.

Lilly is rapidly scaling its production capacity for incretin therapies, projecting to produce at least 1.8 times the number of sellable doses in 2025 compared to 2024, ensuring the company can fulfill rising global demand for treatments such as Mounjaro and Zepbound. With strong first-half results, Lilly raised its 2025 full-year revenue guidance to $60 billion to $62 billion and expects higher performance margins and EPS than previously forecast. For the full year, analysts project revenue to increase by 37%, followed by a 75.8% increase in earnings. Revenue and earnings are expected to increase by 18.6% and 32.8% in 2026.

Lilly is developing a very diverse, innovation-driven portfolio with blockbuster potential in obesity, diabetes, oncology, neuroscience, pain, and genetic medicine, relying on both internal innovation and strategic acquisitions to ensure long-term growth.

On Wall Street, Eli Lilly has earned an overall “Strong Buy” rating. Of the 27 analysts who cover the stock, 18 rate it a “Strong Buy,” two a “Moderate Buy,” and seven recommend a “Hold.” The average analyst price target of $898.58 suggests a 24% increase from current levels. Furthermore, the Street-high estimate of $1,190 implies that the stock could rally by up to 64.2% over the next year.

Valued at $248 billion, Novo Nordisk is a Denmark-based pharmaceutical company that specializes in the treatment of chronic diseases such as diabetes, obesity, rare blood disorders, and other cardiovascular and liver diseases. Novo’s popularity surged with its blockbuster drugs like Ozempic and Wegovy. However, in recent years, the company has suffered as a result of a growing and complex slate of lawsuits in the U.S. arising from the side effects of these treatments.

Novo’s stock has fallen nearly 35.6% year to date, compared to the overall market.

The lawsuits filed against Novo allege that the company failed to adequately notify patients and doctors about the serious adverse effects. These range from severe gastrointestinal injuries such as gastroparesis and bowel obstruction to vision-related issues like optic nerve damage.

In the first half of 2025, Novo Nordisk reported earnings per share of 12.49 DKK, an increase of 23% year-over-year. Total sales also grew 16% over the same period last year to 154.9 billion DKK. This expansion was fueled by a 15% increase in Ozempic sales at CER and a 75% increase in Wegovy sales at CER.

Despite a robust first half, Novo forecasts decreased growth for its GLP-1 medicines in the second half of 2025, particularly for “Wegovy in the US obesity market and for Ozempic in the US GLP-1 diabetes market, as well as for Wegovy in select IO markets.” As a result, the company reduced its full-year guidance, estimating 8% to 14% CER sales growth in 2025.

Analysts who cover the stock expect Novo’s revenue to grow by 22.2% in 2025 but increase by only 7% in 2026. Earnings are expected to follow the same trend of 21.5% growth in 2025, followed by just 5.7% in 2026.

Because Novo was first in developing weight loss drugs, it had the chance to grow a larger market share. However, Lilly could soon take the lead, as Zepbound has shown higher efficacy. Furthermore, with regulatory scrutiny increasing and potential liabilities in the billions, these lawsuits pose not only a financial burden but also a reputational risk to Novo.

Overall, on Wall Street, Novo Nordisk stock is a “Moderate Buy.” Of the 20 analysts who cover the stock, nine rate it a “Strong Buy,” nine say it is a “Hold,” one says it is a “Moderate Sell,” and one suggests a “Strong Sell.” The average analyst price target of $65.88 suggests an 18.5% increase from current levels. Furthermore, the Street-high estimate of $112 implies that the stock could rally by up to 101.4% over the next year.

Both Novo Nordisk and Eli Lilly continue to strengthen their presence in the weight-loss drug market. However, with Lilly’s expanding manufacturing and a robust R&D pipeline spanning obesity, diabetes, oncology, neuroscience, pain, and cardiometabolic disease, it is well-positioned to sustain near- and long-term growth. LLY stock is a better overall investment for a growth-oriented portfolio.

On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com