Can Novo Nordisk Hold Its Edge as the GLP-1 Battle With LLY Heats Up?

The global GLP-1 market has been in the spotlight for the past couple of years as big pharma players realize its multi-billion-dollar potential and the untapped nature. It is currently dominated by Novo Nordisk NVO and Eli Lilly LLY, which market their semaglutide-based medicines, Ozempic for type II diabetes (T2D) and Wegovy (obesity), and tirzepatide-based medicines, Mounjaro (T2D) and Zepbound (obesity), respectively.Competition between LLY and NVO intensified this week as both companies unveiled head-to-head data on their GLP-1 therapies. Eli Lilly reported ACHIEVE-3 head-to-head study data showing that its once-daily investigational oral pill, orforglipron, outperformed Novo Nordisk’s Rybelsus (oral semaglutide) in A1C and body weight reduction in T2D patients. However, orforglipron saw higher discontinuation rates due to gastrointestinal side effects.Novo Nordisk responded with data from the REACH real-world head-to-head study comparing Ozempic to arch-rival Eli Lilly’s Trulicity (dulaglutide). Both Ozempic and Trulicity are once-weekly, subcutaneous GLP-1 receptor agonists (GLP-1 RA) that are indicated for T2D and for reducing the risk of major adverse cardiovascular events (MACE).Per the data readout, NVO’s Ozempic reduced the risk of MACE, including heart attack, stroke, or death, by 23% compared with LLY’s Trulicity. The analysis also showed a 25% reduction in a broader composite endpoint. Notably, Ozempic remains the only GLP-1 RA approved to lower the risk of kidney disease progression and cardiovascular death in patients with T2D and chronic kidney disease. Novo Nordisk shares jumped 6.3% on Thursday following the news.Earlier this week, Novo Nordisk strengthened its competitive edge after securing EU approval to add cardiovascular benefits to the Rybelsus label, supported by data showing a 14% reduction in MACE. In the United States, the FDA is currently reviewing a similar label expansion for Rybelsus, with a decision anticipated later this year.Rising Competition for NVO in the GLP-1 SpaceEli Lilly is Novo Nordisk’s fierce competitor in the GLP-1 diabetes/obesity space. Despite being on the market for less than three years, Mounjaro and Zepbound have become LLY’s key top-line drivers, eating away at NVO’s market share. In the first half of 2025, the drugs generated combined sales of $14.7 billion, accounting for 52% of Eli Lilly’s total revenues. LLY’s Mounjaro and Zepbound follow a dual mechanism of action as a GIP and GLP-1 RA.Several other companies, like Viking Therapeutics VKTX, are also making rapid progress in the development of GLP-1-based candidates in their clinical pipeline. Viking Therapeutics’ dual GIPR/GLP-1 RA, VK2735, is being developed both as an oral and subcutaneous formulations for the treatment of obesity. VKTX recently announced mixed top-line results from a mid-stage study evaluating the safety and efficacy of the oral formulation of VK2735, which caused the stock to drop significantly. Phase III obesity studies with the subcutaneous formulation of VK2735 have also been initiated.NVO’s Stock Price, Valuation & EstimatesYear to date, Novo Nordisk’s shares have lost 28.1% against the industry’s 0.5% growth. The company has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.NVO Stock Underperforms the Industry, Sector & the S&P 500Image Source: Zacks Investment ResearchNovo Nordisk is trading at a premium to the industry, as seen in the chart below. Going by the price/earnings ratio, the company’s shares currently trade at 15.43 forward earnings, which is higher than 14.83 for the industry. The stock is trading much below its five-year mean of 29.25.NVO Stock ValuationImage Source: Zacks Investment ResearchEarnings estimates for 2025 have declined from $3.98 to $3.85 per share over the past 60 days. During the same time frame, Novo Nordisk’s estimates for 2026 earnings per share have deteriorated from $4.56 to $4.07.NVO Estimate MovementImage Source: Zacks Investment ResearchNovo Nordisk currently carries a Zacks Rank #5 (Strong Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Higher. Faster. Sooner. Buy These Stocks NowA small number of stocks are primed for a breakout, and you have a chance to get in before they take off.At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We’ve combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month.You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days.Download the report free now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Novo Nordisk A/S (NVO): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis Report Viking Therapeutics, Inc. (VKTX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks