Can Novo Nordisk's GLP-1 Pill Momentum Offset LLY's Growing Edge?

Novo Nordisk NVO remains a dominant player in the GLP-1 market, marketing its semaglutide drugs Ozempic and Rybelsus for type II diabetes (T2D) and Wegovy for chronic weight management. However, the company’s core franchise is facing mounting competitive pressure from Eli Lilly LLY, despite NVO delivering a better-than-expected second-quarter 2026 performance.

NVO’s reported second-quarter sales rose 3% to $12.21 billion (DKK 78.5 billion) at constant exchange rates (CER). More importantly, its key GLP-1 brands showed signs of slowing. Ozempic generated $4.88 billion (DKK 31.4 billion) in reported sales, flat year over year at CER, while Wegovy injectable generated $3.03 billion (DKK 19.5 billion), also flat at CER. The moderation is concerning as Lilly's competing GLP-1 therapies continue to gain traction.

Lilly, on the other hand, delivered another impressive second-quarter performance, underscoring the looming competitive threat to Novo Nordisk. Its GLP-1 injections, Mounjaro for T2D and Zepbound for obesity, compete directly with Ozempic and Wegovy, respectively. Mounjaro generated $9.9 billion, up 91% year over year, while Zepbound sales rose 46% to $4.9 billion, with volume growth serving as the primary driver. They have been gaining market share through stronger volume growth and demand. As a result, Lilly’s GLP-1 franchise continues to capture a larger share of the diabetes and obesity markets, widening the competitive gap with NVO.

Novo Nordisk, meanwhile, has gained an important new avenue through oral GLP-1s. Wegovy pill generated $0.50 billion (DKK 3.22 billion) in reported second-quarter sales, with prescriptions reaching around 2.9 million during the quarter and exceeding five million since launch. The Ozempic pill/Rybelsus franchise generated $0.81 billion (DKK 5.23 billion). Ozempic pill, approved for adults with T2D, became available nationwide in the United States in May.

However, Lilly is already challenging Novo Nordisk’s oral opportunity with its newly launched once-daily GLP-1 pill, Foundayo (orforglipron) for obesity, which generated $98 million in the second quarter. Lilly has also submitted an application to the FDA seeking U.S. approval of the drug for T2D. Foundayo offers a potential administration advantage over the Wegovy pill, as it can be taken at any time of day without food or water restrictions. This could put NVO’s lead in oral GLP-1s at risk, with Lilly potentially repeating the share gains it has achieved in injectables and making up for NVO’s head start with the Wegovy and Ozempic pills.

Novo Nordisk is taking steps to defend its position in the increasingly competitive GLP-1 market. As part of these efforts, the company has sued Eli Lilly over advertising for Mounjaro and Zepbound, alleging that Lilly’s campaigns rely on outdated comparisons and fail to reflect the newer higher-dose versions of Ozempic and Wegovy. NVO is also relying on an improved financial outlook to support investor confidence, having raised its 2026 guidance to reflect stronger-than-expected GLP-1 sales.

Adjusted sales and operating profit are now expected to decline 0-6% at CER compared with the previous guidance of a 4-12% decline, providing some relief. Still, investor skepticism remains amid pricing pressure and intensifying competition. The GLP-1 pills, particularly Wegovy and Ozempic, give NVO a valuable new growth driver. However, Lilly’s strength in both injectable and oral GLP-1s suggests the new momentum may not be enough to close the competitive gap entirely.

NVO Faces Rising Competitive Pressure Beyond LLY in GLP-1s

The obesity space has drawn much of the spotlight over the past year because of the sizeable and still underpenetrated market opportunity. Smaller biotech firms, such as Viking Therapeutics VKTX and Structure Therapeutics GPCR, are also advancing GLP-1–based therapies to challenge the incumbents. Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed as both oral and subcutaneous formulations for the treatment of obesity. Viking Therapeutics plans to advance oral VK2735 into phase III development for obesity in the fourth quarter of 2026.

Structure Therapeutics’ phase II ACCESS study on its orally administered GLP-1 RA, aleniglipron, demonstrated significant weight loss across all doses. Based on such encouraging results, Structure Therapeutics has initiated dosing patients in its late-stage ACCOMPLISH program to evaluate aleniglipron for obesity.

NVO’s Stock Price, Valuation & Estimates

Year to date, Novo Nordisk shares have lost 8.8% against the industry’s 12.6% growth. The company has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.

NVO Stock Underperforms the Industry, Sector & the S&P 500

Image Source: Zacks Investment Research

Novo Nordisk is trading at a discount to the industry, as seen in the chart below. Going by the price/earnings ratio, the company’s shares currently trade at 13.85 forward earnings, which is lower than 18.73 for the industry. The stock is trading much below its five-year mean of 29.18.

NVO Stock Valuation

Image Source: Zacks Investment Research

Earnings estimates for 2026 have remained constant at $3.39 per share over the past week. During the same time frame, Novo Nordisk’s 2027 earnings estimates have improved from $3.28 to $3.31.

NVO Estimate Movement

Image Source: Zacks Investment Research

Novo Nordisk currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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