Novo (NVO Quick QuoteNVO - Free Report) has an opportunity to extract greater value from semaglutide by expanding its use beyond traditional diabetes, obesity and cardiovascular indications. This strategy is increasingly relevant as the company faces intense competition from Eli Lilly (LLY Quick QuoteLLY - Free Report) across cardiometabolic care. Semaglutide-based GLP-1 products, including Ozempic and Rybelsus for type II diabetes (T2D) and Wegovy for obesity, accounted for roughly 75.5% of Novo’s adjusted first-half 2026 sales, leaving the company highly exposed to changes in competition, pricing and market share.

Novo is already extending semaglutide beyond its traditional diabetes and obesity uses, with Wegovy’s 2025 U.S. approval for noncirrhotic metabolic dysfunction-associated steatohepatitis (MASH) in adults with moderate-to-advanced liver fibrosis marking the clearest example. The FDA nod created a new commercial opportunity in liver disease while broadening Wegovy’s role beyond obesity and cardiovascular care. However, the approval remains subject to confirmatory evidence on long-term clinical outcomes. In March 2026, the European Commission also granted conditional authorization to Kayshild (semaglutide) for adults with noncirrhotic MASH and F2-F3 liver fibrosis.

Novo is also building evidence for semaglutide in several other obesity-related conditions. Data from the STEP 9 study showed significant improvements in knee osteoarthritis (OA) pain and physical function among adults with obesity. At the same time, post-hoc analyses have explored potential benefits in obstructive sleep apnea (OSA), asthma-related outcomes and other obesity-related complications. These areas remain opportunities rather than established indications, and they need additional clinical and regulatory validation before they can generate direct incremental revenues.

Clinical development also carries meaningful risks. Novo discontinued its Alzheimer’s disease program for semaglutide after the phase III EVOKE and EVOKE+ studies failed to meet their primary endpoints. While additional indications could expand semaglutide’s addressable market and diversify growth beyond the core GLP-1 franchise, its commercial potential remains uncertain until successful clinical development and regulatory approval.

LLY Expands Its Incretin Portfolio Across Multiple Indications

Eli Lilly represents a major competitive threat because it is pursuing a similarly broad strategy with its incretin-based portfolio. Mounjaro competes directly with Ozempic in T2D and is now also approved in the United States to reduce major cardiovascular events in adults with T2D at high cardiovascular risk. Zepbound, meanwhile, competes directly with Wegovy in obesity and is also approved for adults with obesity and moderate-to-severe OSA.

Lilly’s expansion extends further with its oral GLP-1 pill, Foundayo (orforglipron), which competes with NVO’s Wegovy pill in obesity and is being studied in T2D, OSA, knee osteoarthritis pain, hypertension, peripheral artery disease and stress urinary incontinence. Lilly is also advancing retatrutide, an investigational once-weekly GIP/GLP-1/glucagon triple agonist, in late-stage studies for obesity and related conditions including T2D, knee OA pain, OSA, chronic low back pain and liver disease.

Thus, expanding semaglutide beyond cardiometabolic care could become an important growth lever for Novo, but it will not operate in a vacuum. Lilly is broadening the clinical and commercial reach of its own incretin portfolio at the same time. Novo’s ability to turn semaglutide’s emerging benefits into approved, reimbursed indications will therefore be critical to generating meaningful growth beyond its increasingly competitive core franchises.

NVO Faces Growing Competition in MASH

The MASH market is attracting more competitors as new treatment options advance. Madrigal Pharmaceuticals (MDGL Quick QuoteMDGL - Free Report) is a direct competitor with Rezdiffra (resmetirom), the first FDA-approved therapy for MASH. Altimmune (ALT Quick QuoteALT - Free Report) is a potential competitor developing its late-stage candidate, pemvidutide, an investigational glucagon/GLP-1 dual agonist for MASH.

MDGL’s Rezdiffra generated $675.6 million in first-half 2026 sales, up 93% year over year, reflecting continued strong physician adoption and patient demand. Madrigal is also expanding its MASH pipeline, including an ongoing phase III study of Rezdiffra in compensated MASH cirrhosis and additional siRNA programs targeting disease-driving genes.

Altimmune’s pemvidutide is currently being evaluated in the global, registrational phase III PERFORMA study following encouraging mid-stage MASH data. ALT’s PERFORMA study is designed to evaluate fibrosis improvement, MASH resolution and clinical outcomes, although a potential 52-week readout is not expected until 2029.

NVO’s Stock Price, Valuation & Estimates

Year to date, Novo shares have lost 26.2% against the industry’s 8.9% 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 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 10.92 forward earnings, which is lower than 17.49 for the industry. The stock is trading below its five-year mean of 28.98.

NVO Stock Valuation

Image Source: Zacks Investment Research

Earnings estimates for 2026 have increased from $3.40 to $3.53 per share over the past 60 days. During the same time frame, Novo’s 2027 earnings estimates have increased from $3.33 to $3.41.

NVO Estimate Movement

Image Source: Zacks Investment Research

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