How Novo Nordisk and Eli Lilly Are Fortifying Their Weight Loss Drug Dominance

The weight loss pharmaceutical sector is experiencing unprecedented momentum. According to Morgan Stanley research, the market is projected to surge from approximately $15 billion in recent years to roughly $150 billion by 2035—representing a tenfold expansion over approximately thirteen years. This explosive trajectory is primarily driven by GLP-1 agonist medications, which function by reducing appetite through delayed gastric emptying and enhanced satiety signaling.

The Market Leadership Challenge

Two industry powerhouses currently command this space: Novo Nordisk and Eli Lilly, collectively holding an estimated 97% market share. Novo Nordisk maintains 62% of the GLP-1 sector, while Eli Lilly controls approximately 35%. However, their entrenched position faces mounting pressure as the sector’s rapid expansion inevitably attracts new competitors.

The competitive landscape is more complex than it initially appears. Drug development requires navigating rigorous regulatory frameworks, and many experimental treatments never reach commercialization. Pfizer, a pharmaceutical heavyweight, discontinued its oral candidate danuglipron in April after potential hepatotoxicity concerns emerged during clinical trials. Even approved products must compete based on efficacy profiles, adverse event tolerability, and physician prescribing patterns—not merely pricing.

The Pipeline Race: Innovation as Market Defense

The current weight-loss treatment category remains in its nascent phase. Existing leaders like Novo Nordisk’s Ozempic and Wegovy, alongside Eli Lilly’s Mounjaro and Zepbound, are all injectable formulations requiring refrigeration, with significant patient out-of-pocket costs. This creates opportunity for differentiated next-generation therapies.

Novo Nordisk is advancing aggressively on multiple fronts. The company has submitted regulatory applications for an oral Wegovy formulation, targeting approval by year-end 2025. Additionally, CagriSema—positioned as Wegovy’s potential successor—is advancing through phase 3 development, with possible market entry anticipated in 2026.

Eli Lilly demonstrates equally impressive momentum. Its investigational oral therapy orforglipron has demonstrated strong phase 3 efficacy signals and could represent the first small-molecule oral option, offering manufacturing advantages and cost reduction potential. Retatrutide, an innovative injectable targeting three distinct hunger-regulating hormones, is similarly in phase 3 evaluation, with potential 2027 availability.

The competitive threat landscape remains limited. Boehringer Ingelheim’s survodutide represents the primary near-term rival, with potential 2027 market arrival. Amgen’s MariTide only commenced phase 3 studies in March, positioning an estimated 2028 launch at earliest.

Valuation Context: Pricing for Growth

Wall Street currently favors Eli Lilly, as evidenced by premium valuation multiples. Eli Lilly trades at a price-to-earnings ratio of 62, compared to 22 for Novo Nordisk. This differential reflects stronger phase 3 performance from orforglipron versus CagriSema’s mixed trial results.

Yet market dynamics remain unpredictable. Physician and patient selection involves multifactorial decision-making beyond clinical efficacy alone. The optimal strategy may involve exposure to both market leaders rather than selecting a single winner.

PEG ratio analysis provides useful perspective:

• Novo Nordisk: 1.5 PEG ratio, 14% annualized growth expectations
• Eli Lilly: 1.9 PEG ratio, 32% annualized growth expectations

Both valuations appear reasonable relative to anticipated earnings expansion trajectories. Ownership of both positions likely captures the upside regardless of which company gains relative market share in this expanding therapeutic category.