A new study raises important implications regarding the competitive balance between these two companies.
Two pharma juggernauts, Novo Nordisk (NVO 1.64%) and Eli Lilly (LLY 1.53%), are picking up speed in their preparations for an epic battle to control the market for weight loss drugs. The prize for the victor will be a larger market share of what may be the most lucrative pharmaceutical market to have ever existed. Per some estimates, the weight loss market could be worth around $144 billion by 2030.
The main clash is yet to occur, as neither company can manufacture enough doses currently to meet the demand for these medicines. But this issue is bound to be temporary, and when the manufacturing investments finally start to pay off, the real show will begin. When that happens, a new piece of evidence suggests that Eli Lilly will have the edge.
Here’s what you need to know.
This comparison didn’t work in Novo Nordisk’s favor
Let’s quickly set the stage for the competition in the obesity-therapies market. As you may know, Novo Nordisk’s drug for weight loss is called Wegovy, and it’s the same molecule as the company’s blockbuster drug Ozempic, which treats type 2 diabetes. That molecule is called semaglutide.
Eli Lilly’s anti-obesity treatment is called Zepbound, which is made using the same molecule — tirzepatide — as what’s in Lilly’s diabetes therapy Mounjaro. Tirzepatide targets the same receptor on cells that semaglutide does, as well as one additional receptor. So it uses two different biological levers that could promote weight loss rather than just one.
Short-term studies have been completed on both drugs, but long-term studies are still ongoing. If one company’s candidate is proven to be more effective at helping people to lose weight, or more tolerable for patients during the process, that would be a significant advantage in securing market share over the long run. Both medicines were tested in clinical trials for treatment durations of roughly a year, and so far, it looks like patients need to get weekly injections indefinitely or risk regaining some of their lost weight.
On July 8, the influential journal JAMA Internal Medicine published the results of an observational study directly comparing tirzepatide and semaglutide across 18,386 patients. Here’s a summary of the researchers’ most important findings:
|
Semaglutide (Novo Nordisk) |
Tirzepatide (Eli Lilly) |
|
|---|---|---|
|
Probability of achieving 15% or greater |
18.1% |
42.3% |
|
Average weight loss after 12 months, |
8.3% |
15.3% |
|
Discontinuation rate |
52.5% |
55.9% |
Data source: “Semaglutide vs Tirzepatide for Weight Loss in Adults With Overweight or Obesity,” JAMA Internal Medicine, July 8, 2024.
As you can see, tirzepatide was found to be unambiguously more effective than semaglutide, as it had better odds of helping patients to lose weight, and they lost more weight on average. This is not good news for Wegovy’s market share, but it is good news for Zepbound’s.
The catch, of course, is that both medicines saw high rates of patients stopping treatment, which is almost certainly because they experienced uncomfortable side effects rather than because they didn’t accomplish weight loss goals. While Wegovy seemed to be marginally less burdensome for patients than Zepbound, the distinction between the two is probably not economically meaningful.
So there isn’t really any silver lining for Novo Nordisk in this report.
There’s no reason to do anything drastic right now
Don’t sell your shares of Novo Nordisk just yet. Regardless of the new data, the gold rush in the market for weight loss therapies is closer to starting than it is to ending.
Remember, at the moment, neither of these two companies can scale up its manufacturing capacity fast enough. There are currently shortages in the U.S. of both Wegovy and Zepbound, and enrollment of new patients has been paused at times to ensure adequate supply for existing patients. There’s little chance that the bottom of the market is anywhere in sight. Therefore, if Novo Nordisk can scale up its manufacturing faster, it can still capture a larger market share than Eli Lilly.
Even if it can’t, it has additional weight loss medicines in clinical testing that could one-up Zepbound. There’s no guarantee that Novo Nordisk will produce a better version, but the research and development (R&D) process isn’t over, even for its programs investigating solely semaglutide. And with a market as massive as anti-obesity medicines, holding even a large slice could be enormously lucrative.