Is Novo Nordisk falling behind Eli Lilly in the weight-loss drug race?

Core Viewpoint - Novo Nordisk's stock has declined significantly due to Eli Lilly's positive Phase 3 results for its oral weight-loss treatment, orforglipron, which is seen as a competitive threat in the anti-obesity market valued at $100 billion [1][2]. Group 1: Stock Performance and Market Reaction - Novo Nordisk shares fell more than 10% following Eli Lilly's announcement, and the stock is down nearly 35% from its year-to-date high in early March [1][2]. - BMO analysts downgraded Novo Nordisk's stock to "market perform" and reduced the price target from $105 to $64, indicating limited upside potential [3]. - Over the past 12 months, Eli Lilly's stock has outperformed Novo Nordisk, with LLY down only 13% from its 52-week high, while NVO has lost over 70% since July 2024 [3]. Group 2: Financial Performance - In its fiscal Q4, Novo Nordisk reported a net profit increase of 29% year-over-year, reaching $3.98 billion, despite concerns about competition from Eli Lilly [5]. - Wegovy sales for Novo Nordisk more than doubled to $2.76 billion in the fiscal fourth quarter, although analysts had expected sales to exceed $3.0 billion [6]. Group 3: Competitive Landscape - Eli Lilly's advancements in its commercial and clinical portfolio have allowed it to surpass Novo Nordisk's early lead in the obesity treatment market [4]. - Novo Nordisk's CEO expressed confidence in competing in the U.S. market with tablet-based treatments before Lilly's launch [7]. Group 4: Analyst Sentiment - Despite the downgrade from BMO, the consensus rating on Novo Nordisk remains "overweight," with a mean target of $108, suggesting potential upside of approximately 80% from current levels [7].