Battle for weight-loss supremacy shifts from jabs to pills
Novo Nordisk’s Wegovy tablet offers Danish drugmaker window to win back market share from Eli Lilly
The latest entrant to the booming global market for weight-loss drugs has taken off more quickly than almost any previous pharmaceutical product.
Novo Nordisk’s once-daily Wegovy pill was approved by US regulators in late December. By the end of February, US doctors had written more than 300,000 prescriptions for the drug, according to data provider IQVIA. The US is the only country where it has been launched so far.
For the Danish drugmaker, it is welcome respite. The pioneer behind the Ozempic brand that is synonymous with blockbuster weight-loss drugs had a commanding position until 18 months ago.
Since then, it has fallen behind rival Eli Lilly in the crucial US market, its share price hit hard by intensifying competition, disappointing clinical results and worries about its pipeline, future sales and profits.
The strong early demand for the Wegovy pill, which led to average weight loss of 17 per cent in trials, offers Novo a chance to regain ground. Brian Lian, chief executive of Viking Therapeutics, a San Diego biotech working on weight-loss drugs, called it “the fastest drug launch in history”. It was accompanied by a multimedia blizzard of publicity that included Novo’s first Super Bowl commercial.
“It certainly shows there’s extraordinary demand out there for these therapies,” Lian said.
Just as Apple and Samsung have long competed for dominance in the smartphone market, Novo and Lilly are vying for leadership in weight-loss drugs.
Lilly is ahead on market share but the next battleground is pills. The shift to oral treatments is widely seen as key to expanding the market: until the arrival of the Wegovy pill, these hugely popular new drugs had to be taken as an injection.
Novo has made it to US medicine cabinets first but Lilly’s weight-loss pill orforglipron, which produced average weight loss of 12.4 per cent in trials, is expected to win regulatory approval in April.
There is a lot riding on the choices of US doctors and consumers.
Once Europe’s most valuable company by market capitalisation thanks to the runaway success of Ozempic, Novo is now smaller than European rivals AstraZeneca, Roche and Novartis by that measure.
Its shares are down more than 50 per cent over the past 12 months and trade two-thirds below their peak of June 2024.
Lilly meanwhile has become a $1tn company thanks to the success of its weight-loss drugs which, as with Novo, stemmed from its expertise in diabetes.
Having struggled to replace sales lost when patents on some of its most profitable drugs expired in the 2010s, Lilly’s tirzepatide — sold as Zepbound for weight loss and Mounjaro for diabetes — is now the world’s second-biggest drug by sales.
But Evan Seigerman, an analyst at BMO Capital Markets, believes that the successful US launch of Wegovy demonstrates Novo has “learned from its mistakes”. It previously struggled to adjust its supply chain to meet huge demand but has now increased manufacturing capacity and also has a programme to sell the drug directly to consumers and bypass pharmacy companies.
The pill was “probably one of the fastest launches we have seen” in the pharmaceutical sector, he said. “I don’t think I have seen anything like this. But again, [the pill] is a product that is widely available, widely popular and easy to access.”
Novo had “an opportunity to claw back some market share with the pill,” he added, “but only until Orforglipron is approved.”
Still, the Danish drugmaker has a number of challenges to contend with. Semaglutide, the active ingredient in Wegovy and Ozempic, its respective weight-loss and diabetes treatments, will lose patent protection in India, China, Brazil and Turkey this year.
It has already lost patent protection in Canada, the world’s second-largest market for weight loss and diabetes drugs.
In Brazil, 11 manufacturers have filed for regulatory approval to make generic weight-loss drugs when Novo loses its patent protection in the country next month, according to Jefferies. In India, about 40 local manufacturers are expected to compete and cut the price of weight-loss drugs in half, the investment bank said.
While Novo’s Wegovy pill must be taken on an empty stomach and patients have to wait at least 30 minutes before eating, drinking or taking other oral medications to give it time to be absorbed, Lilly’s pill does not have the same restrictions.
Mike Doustdar, chief executive of Novo, acknowledged that Novo’s pill was “limited” because it could not be taken with food, but said this had not proved a major concern for patients. “[People] go to the shower, get dressed and go downstairs or wherever they are having their breakfast and before you know it the half an hour is finished,” he said.
Lilly’s dominant position in the US market is clear from prescription data. Its portfolio of weight-loss drugs, including diabetes treatments, accounted for 1.4mn prescriptions as at the end of February, according to IQVIA.
Novo’s weight-loss drugs — including pills and injections — accounted for 924,000 prescriptions.
These figures do not include all of the companies’ online sales. Doustdar told the FT that more than 600,000 prescriptions have been written for the Wegovy pill alone since its launch.
Michael Nedelcovych, director of equity research at TD Cowen, said the Wegovy pill could offer Novo a way to compete. “If Novo can successfully navigate the launch . . . [and] access that market, that’s one way to fight,” he said. The company could also benefit if some patients prefer taking a pill rather than an injection, at least until Lilly launches its own version.
There is also the all-important question of price. Some patients using Lilly weight-loss injections switched to Novo’s Wegovy pill “because it was cheaper”, according to Daniela Hurtado Andrade, a doctor in Jacksonville, Florida.
Novo is selling the lowest 1.5mg and 4mg doses of its Wegovy pill for $149 for a month’s supply in the US until April, when the 4mg dose will rise to $199 a month. Patients with insurance can pay as little as $25 a month for the lowest doses. Higher 9mg and 25mg doses are priced at $299 a month.
“If it is cheaper than the injectable options, that could be a reason to consider [the pill],” Hurtado Andrade said.
For weight-loss injections, the list price, paid by people without insurance, can be as much as $1,300 a month. With insurance and discounts, the cost is substantially lower.
Lilly has said it will sell orforglipron for $149 a month with higher doses costing up to $399.
Pricing could also help determine how quickly the pills expand the market, with early signs that oral weight-loss drugs are drawing in new patients.
In a report last month, Goldman Sachs said the “unprecedented” uptake of the pill had come from new users rather than people switching away from injections.
Lian of Viking Therapeutics agreed that people who had not previously taken weight-loss drugs were now buying the pill, suggesting there was little “cannibalisation” of injectable treatments.
But expansion in the market does not mean competition will ease. New entrants will still need a clear point of differentiation, said Marek Poszepczynski, co-manager of Schroders’ biotech investment fund.
“You need to have an edge otherwise there’s no point fighting in this market.”