Novo Nordisk (NVO) Stock: Shares Drop Following Eli Lilly’s Obesity Pill Trial Results

TLDR:

Novo Nordisk stock closed at $58.33, up 0.43% while broader market fell Novo shares dropped 7% in Copenhagen after Eli Lilly released positive trial results for oral obesity drug Lilly’s experimental pill orforglipron showed weight loss and blood sugar control comparable to injectables Novo Nordisk’s upcoming earnings report expected May 7, with projected EPS of $0.91 Weight-loss drug market could reach $130 billion by decade’s end

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Novo Nordisk shares dropped sharply in Copenhagen trading following Eli Lilly’s announcement of promising trial results for its experimental obesity pill. The Danish drugmaker, known for its popular weight-loss injection Ozempic, now faces increased pressure in the fast-growing GLP-1 drug market.

Novo’s stock closed at $58.33 in the latest U.S. trading session, marking a 0.43% increase when the broader market fell. The S&P 500 registered a loss of 2.36% during the same period.

Novo Nordisk A/S (NVO)

However, in Copenhagen trading, Novo shares sank more than 7% after Eli Lilly released data showing its oral obesity treatment, orforglipron, achieved weight loss and blood sugar control results comparable to injectable treatments.

The news sent Lilly’s stock 14.3% higher on Thursday, highlighting the market’s positive response to this development in the obesity treatment landscape.

Race for Oral Weight-Loss Treatments

The competition to develop convenient, needle-free weight-loss treatments is intensifying as both pharmaceutical giants seek to expand their presence in the GLP-1 drug market.

Eli Lilly’s latest data adds pressure on Novo Nordisk, which has seen its market value decline by about a third since the beginning of 2025.

In the late-stage trial, Lilly’s daily pill helped patients with Type 2 diabetes reduce blood sugar and lose weight, with a safety profile similar to current injectable options.

The highest dose of orforglipron led to an average weight loss of 7.9% – approximately 16 pounds – after 40 weeks of treatment. Researchers noted patients did not reach a weight-loss plateau by the end of the study.

This suggests further weight reductions might be possible with continued treatment, making the pill potentially even more effective over longer periods.

Clinical Performance and Side Effects

While the weight-loss results met expectations, the pill fell short on a key diabetes measure. It lowered hemoglobin A1c levels by 1.3% to 1.6% from a starting point of 8%.

This improvement was below some analysts’ expectations, which had been closer to 1.8% to 2.1% – comparable to the performance of Novo’s Ozempic.

Side effects caused about 8% of patients on the highest dose to stop treatment. Most symptoms were gastrointestinal, ranging from mild to moderate in severity.

Nausea, vomiting, and diarrhea were the most commonly reported issues among trial participants. These side effects mirror those commonly seen with injectable GLP-1 treatments.

Financial Outlook for Novo Nordisk

Despite recent stock pressure, Novo Nordisk’s financial projections remain strong. Investors are eagerly awaiting the company’s upcoming earnings report, scheduled for May 7, 2025.

The company’s earnings per share are projected to be $0.91, reflecting a 9.64% increase from the same quarter last year. Revenue is expected to reach $11.33 billion, a 19.09% rise from the equivalent quarter in 2024.

For the full year, analysts project earnings of $3.80 per share and revenue of $49.74 billion. These estimates represent year-over-year growth of 15.85% and 18.15%, respectively.

However, Novo stock has fallen by 24.43% in the past month, underperforming both the Medical sector’s loss of 9.83% and the S&P 500’s decline of 5.6%.

In terms of valuation, Novo Nordisk currently trades at a Forward P/E ratio of 15.28, above the industry average of 13.38, indicating the stock trades at a premium compared to peers.

The company also has a PEG ratio of 0.93, which is favorable compared to the Large Cap Pharmaceuticals industry average of 1.18. This suggests potentially better value when accounting for growth expectations.

Novo Nordisk currently holds a Zacks Rank of #3 (Hold), indicating neutral short-term expectations despite the recent market reactions to competitive pressures.

The broader Large Cap Pharmaceuticals industry currently ranks in the top 27% of all 250+ industries tracked by Zacks, suggesting relatively strong performance for the sector overall.

Eli Lilly’s orforglipron is not the only competitor in the race. Other companies like Pfizer have also been working on oral GLP-1 treatments, though some have faced development hurdles.

Analysts believe that developing effective pills will be key to unlocking the full potential of what could become a $130 billion market by the end of the decade.

Weight-loss injections from both Novo Nordisk and Eli Lilly have already generated billions in revenue, but oral options could dramatically expand patient access and market size.

Lilly’s latest trial results represent a step forward in this high-stakes race, potentially reshaping competitive dynamics in the obesity treatment market.

The Danish drugmaker now faces increased pressure to advance its own oral GLP-1 treatments to maintain its strong position in this rapidly evolving and lucrative therapeutic area.

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