Eli Lilly (LLY) has emerged as a strong competitor to Novo Nordisk (NVO) in the weight-loss drug market. The Food and Drug Administration recently approved Lilly’s new drug, Zepbound, which mimics two gut hormones called GLP-1 and GIP. These hormones improve feelings of satiety, regulate blood glucose levels, and slow down stomach emptying. Zepbound is based on tirzepatide, the same drug used in Lilly’s diabetes treatment, Mounjaro.
In a recent note, Leerink Partners analyst David Risinger highlighted that Zepbound is being offered at a 20% discount compared to Novo Nordisk’s weight-loss drug, Wegovy. This pricing advantage could potentially drive better insurance coverage and patient uptake for Lilly. However, Novo Nordisk’s Wegovy has been on the market since 2021 and is expected to generate $4.4 billion in sales this year and $7.97 billion next year, according to FactSet. Zepbound, on the other hand, is projected to generate $75 million in sales this year and $3.79 billion next year.
Both Eli Lilly and Novo Nordisk are currently facing supply constraints for their diabetes and weight-loss drugs. Prescriptions for Wegovy, Ozempic, and Mounjaro have been fluctuating and decreasing due to these supply issues, according to a report by researcher Iqvia. To address this, both companies have announced plans to invest billions of dollars in expanding production.
Despite these challenges, analysts predict that Eli Lilly’s Mounjaro sales will skyrocket by 841% this year to reach $4.55 billion. They also expect Zepbound to see significant growth next year, with projected sales of $3.79 billion, representing a nearly 5,000% increase.
In addition to their weight-loss drugs, both Eli Lilly and Novo Nordisk have other late-stage assets in the pipeline. Eli Lilly is awaiting FDA approval for its Alzheimer’s treatment, donanemab, and has an eczema drug under regulatory review. The company is also conducting clinical trials for drugs targeting prostate and breast cancer, Crohn’s disease, diabetes, and weight loss. Investors are particularly interested in Lilly’s experimental obesity treatment, retatrutide, which targets three gut hormones.
Overall, Eli Lilly’s entrance into the weight-loss drug market has created healthy competition with Novo Nordisk. Both companies are expected to see significant sales growth in the coming years, with Lilly aiming to catch up to Novo Nordisk’s market dominance.