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Can Novo Nordisk Sustain Its GLP-1 Edge Amid Lilly's Growing Pressure?
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Key Takeaways
Novo Nordisk raised its 2026 outlook after strong Q1 GLP-1 sales beat estimates.
NVO faces rising pressure from Lilly's Mounjaro, Zepbound and oral GLP-1 drug Foundayo.
Novo Nordisk is expanding Wegovy, Ozempic and Rybelsus labels to defend market share.
Novo Nordisk (NVO - Free Report) is a dominant player in the GLP-1 space, marketing its semaglutide drugs under brand names Ozempic (pre-filled pen) and Rybelsus (oral tablet) for type II diabetes (T2D), and Wegovy (injection and oral tablet) for chronic weight management.
Novo Nordisk’s growth trajectory was notably pressured in 2025 by the widespread availability of compounded GLP-1 alternatives in the obesity market, eroding demand for its branded therapies. In 2026, the company succeeded in curbing the proliferation of these compounded products through legal measures, stricter FDA oversight and strategic partnerships with telehealth providers. Despite this progress, Novo Nordisk continues to face broader structural challenges that weigh on its sales growth and compress operating margins.
Investor sentiment improved after NVO comfortably beat earnings and revenue expectations in the first quarter, driven by higher GLP-1 sales. The company also raised its 2026 outlook, signaling that management may be regaining control following months of slowing growth concerns. Novo Nordisk now expects adjusted sales and operating profit to decline 4-12% at CER in 2026 compared with its earlier forecast of a 5-13% decline, supported by rising GLP-1 demand, especially in obesity care, broader treatment adoption and continued Wegovy launches in new markets.
NVO Threatened by LLY’s Expanding GLP-1 Market Presence
Novo Nordisk’s near-term visibility remains clouded primarily by intensifying competition from Eli Lilly (LLY - Free Report) , accompanied by other factors, like pricing pressure in the United States, weaker injectable GLP-1 prescription trends and reduced Medicaid obesity coverage. Additional risks include the MFN pricing agreement, gradual semaglutide exclusivity losses in certain markets and elevated spending on R&D, manufacturing and commercial expansion.
Eli Lilly continues to strengthen its position in the obesity and diabetes markets, raising questions about Novo Nordisk’s ability to defend market share and maintain pricing power over time. LLY also comprehensively beat earnings and revenue estimates in the first quarter of 2026, driven by robust volume growth in its tirzepatide (GLP-1) injections, including Mounjaro for T2D and Zepbound for obesity, which compete directly with NVO’s Ozempic and Wegovy.
Novo Nordisk gained a first-mover advantage in oral obesity treatments after launching an oral version of Wegovy in January 2026, ahead of Eli Lilly’s oral GLP-1 drug, Foundayo. However, Lilly could quickly narrow the gap as Foundayo offers greater convenience with no food restrictions, while oral Wegovy must be taken on an empty stomach. Wegovy, though, appears to have a more favorable safety and tolerability profile, with fewer gastrointestinal side effects.
To strengthen its position, Novo Nordisk is expanding its obesity and diabetes portfolio through new approvals and label expansions. Rybelsus’ label was expanded to lower cardiovascular risk in high-risk T2D patients, while Wegovy expanded its reach with cardiovascular, HFpEF and osteoarthritis indications alongside approvals for higher-dose injections in the United States and Europe. Meanwhile, Ozempic remains the only GLP-1 approved to slow kidney disease progression and reduce cardiovascular death in diabetes patients, with additional label expansion efforts underway for peripheral artery disease.
The FDA recently approved an oral version of Ozempic for adult T2D patients, which NVO is planning to launch soon. A supplemental application for a higher 25 mg tablet is also under review, with a regulatory decision expected by the end of 2026. Novo Nordisk also intends to seek regulatory approval for both Rybelsus and oral Ozempic in pediatric patients with T2D in the United States and the EU in the second half of 2026. It also continues to advance multiple next-generation obesity and diabetes candidates to reinforce the long-term growth outlook.
Small Biotechs Eye Entry Into the Obesity Pill Market
The obesity space is also attracting new contenders to challenge the incumbents. Smaller biotech firms, like Viking Therapeutics (VKTX - Free Report) and Structure Therapeutics (GPCR - Free Report) , are advancing GLP-1–based therapies to challenge the incumbents.
Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity. Viking 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. Structure Therapeutics expects to initiate the late-stage program of aleniglipron in obesity in the second half of 2026.
NVO’s Stock Price, Valuation & Estimates
Year to date, Novo Nordisk shares have lost 7.4% compared with the industry’s 2.3% decline. 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 13.77 forward earnings, which is lower than 16.73 for the industry. The stock is trading much below its five-year mean of 29.25.
NVO Stock’s Valuation
Image Source: Zacks Investment Research
Earnings estimates for 2026 have improved from $3.37 to $3.47 per share over the past 30 days. During the same time frame, Novo Nordisk’s 2027 earnings estimates have increased from $3.41 to $3.44 per share.
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Can Novo Nordisk Sustain Its GLP-1 Edge Amid Lilly's Growing Pressure?
Key Takeaways
Novo Nordisk (NVO - Free Report) is a dominant player in the GLP-1 space, marketing its semaglutide drugs under brand names Ozempic (pre-filled pen) and Rybelsus (oral tablet) for type II diabetes (T2D), and Wegovy (injection and oral tablet) for chronic weight management.
Novo Nordisk’s growth trajectory was notably pressured in 2025 by the widespread availability of compounded GLP-1 alternatives in the obesity market, eroding demand for its branded therapies. In 2026, the company succeeded in curbing the proliferation of these compounded products through legal measures, stricter FDA oversight and strategic partnerships with telehealth providers. Despite this progress, Novo Nordisk continues to face broader structural challenges that weigh on its sales growth and compress operating margins.
Investor sentiment improved after NVO comfortably beat earnings and revenue expectations in the first quarter, driven by higher GLP-1 sales. The company also raised its 2026 outlook, signaling that management may be regaining control following months of slowing growth concerns. Novo Nordisk now expects adjusted sales and operating profit to decline 4-12% at CER in 2026 compared with its earlier forecast of a 5-13% decline, supported by rising GLP-1 demand, especially in obesity care, broader treatment adoption and continued Wegovy launches in new markets.
NVO Threatened by LLY’s Expanding GLP-1 Market Presence
Novo Nordisk’s near-term visibility remains clouded primarily by intensifying competition from Eli Lilly (LLY - Free Report) , accompanied by other factors, like pricing pressure in the United States, weaker injectable GLP-1 prescription trends and reduced Medicaid obesity coverage. Additional risks include the MFN pricing agreement, gradual semaglutide exclusivity losses in certain markets and elevated spending on R&D, manufacturing and commercial expansion.
Eli Lilly continues to strengthen its position in the obesity and diabetes markets, raising questions about Novo Nordisk’s ability to defend market share and maintain pricing power over time. LLY also comprehensively beat earnings and revenue estimates in the first quarter of 2026, driven by robust volume growth in its tirzepatide (GLP-1) injections, including Mounjaro for T2D and Zepbound for obesity, which compete directly with NVO’s Ozempic and Wegovy.
Novo Nordisk gained a first-mover advantage in oral obesity treatments after launching an oral version of Wegovy in January 2026, ahead of Eli Lilly’s oral GLP-1 drug, Foundayo. However, Lilly could quickly narrow the gap as Foundayo offers greater convenience with no food restrictions, while oral Wegovy must be taken on an empty stomach. Wegovy, though, appears to have a more favorable safety and tolerability profile, with fewer gastrointestinal side effects.
To strengthen its position, Novo Nordisk is expanding its obesity and diabetes portfolio through new approvals and label expansions. Rybelsus’ label was expanded to lower cardiovascular risk in high-risk T2D patients, while Wegovy expanded its reach with cardiovascular, HFpEF and osteoarthritis indications alongside approvals for higher-dose injections in the United States and Europe. Meanwhile, Ozempic remains the only GLP-1 approved to slow kidney disease progression and reduce cardiovascular death in diabetes patients, with additional label expansion efforts underway for peripheral artery disease.
The FDA recently approved an oral version of Ozempic for adult T2D patients, which NVO is planning to launch soon. A supplemental application for a higher 25 mg tablet is also under review, with a regulatory decision expected by the end of 2026. Novo Nordisk also intends to seek regulatory approval for both Rybelsus and oral Ozempic in pediatric patients with T2D in the United States and the EU in the second half of 2026. It also continues to advance multiple next-generation obesity and diabetes candidates to reinforce the long-term growth outlook.
Small Biotechs Eye Entry Into the Obesity Pill Market
The obesity space is also attracting new contenders to challenge the incumbents. Smaller biotech firms, like Viking Therapeutics (VKTX - Free Report) and Structure Therapeutics (GPCR - Free Report) , are advancing GLP-1–based therapies to challenge the incumbents.
Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity. Viking 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. Structure Therapeutics expects to initiate the late-stage program of aleniglipron in obesity in the second half of 2026.
NVO’s Stock Price, Valuation & Estimates
Year to date, Novo Nordisk shares have lost 7.4% compared with the industry’s 2.3% decline. 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
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 13.77 forward earnings, which is lower than 16.73 for the industry. The stock is trading much below its five-year mean of 29.25.
NVO Stock’s Valuation
Earnings estimates for 2026 have improved from $3.37 to $3.47 per share over the past 30 days. During the same time frame, Novo Nordisk’s 2027 earnings estimates have increased from $3.41 to $3.44 per share.
NVO’s Estimate Movement
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.