LLY vs. NVO: Which Weight-Loss Drug Stock is a Stronger Play Now?

Core Insights - Novo Nordisk and Eli Lilly dominate the diabetes and obesity market with their GLP-1 products, including Lilly's Mounjaro and Zepbound, and Novo Nordisk's Ozempic, Rybelsus, and Wegovy [1][2] Company Performance - Lilly's Cardiometabolic Health segment generated nearly $30 billion in sales in 2024, accounting for approximately 66% of total revenues, while Novo Nordisk's Diabetes and Obesity care segment generated $39.4 billion (DKK 271.8 billion), representing 93.6% of total sales [2] - Lilly's Mounjaro and Zepbound generated combined sales of $16.5 billion in 2024, making up around 36% of the company's total revenues [5] - Novo Nordisk's GLP-1 sales in diabetes increased by 21% in 2024, with Wegovy sales rising by 86% [11] Growth Prospects - Lilly expects sales of Mounjaro and Zepbound to improve in 2025 due to increased manufacturing capacity and geographic expansions [7] - Novo Nordisk is addressing supply constraints for Wegovy by investing in production and has closed a deal to enhance supply [12] - Both companies are investing in new drug development to maintain their market positions as competition in the obesity market intensifies [16] Competitive Landscape - The obesity market is projected to expand to $100 billion by 2030, with increasing competition from companies like Amgen and Viking Therapeutics developing GLP-1-based candidates [16][18] - Lilly's Zepbound has shown better performance than Wegovy in weight-loss studies, potentially shifting patient preference [15] Financial Metrics - The Zacks Consensus Estimate for Lilly's 2025 sales and EPS implies year-over-year increases of 33.2% and 81.1%, respectively [20] - The Zacks Consensus Estimate for Novo Nordisk's 2025 sales and EPS implies year-over-year increases of 17.6% and 15.9%, respectively [22] - Lilly's stock has declined by 6.1% year-to-date, while Novo Nordisk's stock has dropped by 25.1% [25] Valuation - Lilly's shares trade at a forward price/earnings ratio of 28.25, higher than Novo Nordisk's 15.88 [28] - Lilly's dividend yield is 0.8%, while Novo Nordisk's is around 2.6% [29] Market Position - Lilly has a market cap of approximately $700 billion, significantly larger than Novo Nordisk's market cap of around $281 billion [34]