Lilly and Novo Nordisk Compete for Weight-Loss Market Dominance
Eli Lilly's (LLY:US) new weight-loss drug Zepbound is gaining ground in the U.S. market against Novo Nordisk's (NOVO:US) Wegovy. According to IQVIA data, Lilly has captured a 40% market share since Zepbound's launch in December, reaching 130,000 prescriptions for the week ending July 19, compared to 200,000 for Wegovy.
Clinical trials indicate Zepbound leads to slightly higher weight loss on average than Wegovy, driving some patients to prefer Lilly's treatment. However, both companies are struggling to meet the unprecedented demand for these weekly injection medications. Dr. Eduardo Grunvald, an obesity medicine physician at the University of California, San Diego, remarked, "The reality we live in right now is that we are beholden to these supply issues."
Five U.S. obesity specialists told Reuters they prescribe whichever drug is available to ensure continued treatment, even if it means switching between the two. Investors are keenly awaiting supply updates from Novo and Lilly in their upcoming quarterly reports. Novo acknowledged ongoing supply issues on its website, while Lilly's CEO stated the Zepbound shortage would end "very soon." The FDA's recent update listed Zepbound as available but still included it on the shortage list.
Analysts predict the market for new weight-loss drugs could reach $150 billion annually by the early 2030s. Both companies plan to invest billions to expand manufacturing capabilities and launch their treatments in new countries. Despite these efforts, the U.S. market, where over 70% of adults are obese or overweight, remains the most lucrative.
Nicholas Anderson, Managing Director at Thornburg Investment Management, noted, "For both companies, the real driver of results right now is a supply question rather than a demand one." Analysts forecast a roughly 50-50 split of the U.S. market by the end of 2024 as Lilly increases its production capacity, potentially giving it an edge if demand for Zepbound remains high.
On a congressional-related note, Representative Ro Khanna sold shares of Eli Lilly in July 2024, while Congressman Michael McCaul purchased shares of Novo Nordisk in May 2024.
