Healthcare company Novo Nordisk (NVO) has reported promising results from its latest clinical trial for its obesity treatment. Notably, tripling the drug’s dose helped patients achieve significantly more weight loss, strengthening the company’s position as it competes with U.S. rival Eli Lilly (LLY) in the growing obesity treatment market. Following the trial results, Novo’s Copenhagen-listed shares gained almost 2% as of this writing.
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For context, Wegovy is Novo Nordisk’s prescription drug for long-term weight management, using the active ingredient semaglutide, which is also sold as Ozempic for diabetes. Meanwhile, Eli Lilly offers Mounjaro and Zepbound, which use tirzepatide for weight loss.
Novo Nordisk Shows Progress, Yet Trails Eli Lilly
According to Novo’s two late-stage clinical trials, semaglutide showed strong results in testing a 7.2 mg dose, well above the current approved 2.4 mg dose. In the larger trial, patients lost an average of 19% of their body weight after 72 weeks, compared with 16% on the standard 2.4 mg dose and 4% on a placebo.
However, the results were slightly lower than Eli Lilly’s tirzepatide, which achieved up to 22.5% weight loss at its top approved dose.
Still, experts see value in the incremental gains. Remarkably, Naveed Sattar, a professor of metabolic medicine at the University of Glasgow, noted that the extra weight-loss benefit is significant, especially as the cost of high-dose tirzepatide has risen in certain regions. He also pointed out that semaglutide 7.2 mg could offer a more affordable alternative if priced competitively.
Race for Weight-Loss Market Heats Up
The race for the weight-loss drug market is intensifying as Eli Lilly and Novo Nordisk compete to capture market share. With recent trial results and new dosing strategies, investors and patients are closely watching how both companies will perform.
Meanwhile, Novo has lost ground in the U.S. to both Lilly and other copycat drugs, and its shares have dropped 60% over the past year. Most recently, Novo announced a major restructuring, reducing its global workforce by 11%, or about 9,000 jobs. Amid these challenges, investors have been hoping that Novo Nordisk would strengthen its pipeline of new obesity drugs, as many view Eli Lilly as offering more options in clinical trials. Even so, the latest data shows that semaglutide can still provide meaningful incremental gains.
LLY or NVO: Which Pharma Stock Offers Higher Upside?
Using the TipRanks Stock Comparison tool, we analyzed NVO and LLY to determine which stock offers greater upside potential, according to analysts.
According to TipRanks, NVO stock carries a Moderate Buy rating, with an average price target of $67.71, implying a 23.4% upside from current levels. Meanwhile, LLY stock holds a Strong Buy rating, supported by 16 Buys and 4 Holds. Eli Lilly’s average price target of $913.69 suggests an upside of 21% potential gain.