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Novo Nordisk’s shares appear to be better than Lilly’s after the summer stumble

Novo Nordisk’s shares appear to be better than Lilly’s after the summer stumble

(Bloomberg) — Novo Nordisk A/S is behind Eli Lilly & Co. this year. entered the race to become the big stock market winner in anti-obesity drugs. Analysts expect the Danish company to catch up.

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Less than a year after Eli Lilly started selling Zepbound, sales of the obesity drug are already more than half of Novo Nordisk’s Wegovy treatment, sending its New York-listed shares up 54% this year . Meanwhile, shares of Novo Nordisk have fallen 25% since hitting a record high in June.

However, analysts see bigger gains for Novo and predict the stock will rise 25% over the next year, based on price targets set by Bloomberg, versus 13% for Lilly. The case for Novo: The company is taking steps to ensure it can keep up with growing demand for Wegovy, while at the same time the results of its time studies with its next-generation weight loss drug can drive further profits.

“Given the upcoming data readouts over the next twelve months, we see significant upside potential for Novo to exceed market expectations and regain its leadership in weight loss and metabolic medicines,” said Paul Middleton, senior portfolio manager at Mirabaud Asset Management .

The next milestone for both companies is just around the corner: Lilly reports third-quarter results on Wednesday, while Novo Nordisk is scheduled to do so the following week. Investors will focus on supply and demand dynamics for the blockbuster weight-loss treatments, drug pricing and any shifts in market share.

Novo Nordisk has gotten a lot of attention from investors in recent years, in part because it beat Lilly to the market with its weight-loss drug, part of a class of drugs known as GLP-1s. Novo received approval from US regulators for Wegovy in June 2021.

The resulting market frenzy caused Novo’s shares to soar, making the Danish drugmaker Europe’s largest listed company by market value. Lilly stayed behind and was given permission to sell the obesity treatment Zepbound in November last year.

Analysts estimate that Novo Nordisk’s Wegovy and its sister drug Ozempic – a diabetes treatment that became popular among Hollywood celebrities looking to stay fit – had combined sales of $6.8 billion in the third quarter. Lilly’s Zepbound and diabetes treatment Mounjaro are expected to have generated $5.4 billion in the same period.