Novo Nordisk vs. Viking Therapeutics: Which GLP-1 Stock Has More Upside?

Core Viewpoint - Novo Nordisk and Viking Therapeutics are significant players in the obesity treatment market, with Novo Nordisk being a market leader and Viking Therapeutics showing potential as a biotech disruptor [1][2][3]. Group 1: Novo Nordisk (NVO) - Novo Nordisk holds a 54% value market share in the GLP-1 segment as of Q1 2025, making it a leader in the diabetes and obesity treatment market [4]. - Wegovy, a key product for Novo Nordisk, saw an 83% revenue increase in Q1 2025 due to strong prescription growth, contributing positively to overall revenues alongside Ozempic [5]. - The acquisition of CDMO Catalent in late 2024 has enhanced Novo Nordisk's production capacity, resolving the shortage of semaglutide products [6]. - CVS Caremark has designated Wegovy as its preferred GLP-1 therapy for weight loss, effective July 1, which may provide a commercial advantage [7]. - Novo Nordisk is exploring new indications for semaglutide, potentially expanding its patient population and boosting sales [8]. - The company faces competition from Eli Lilly, which markets its own obesity treatments, posing a threat to Novo Nordisk's market share [9]. - NVO's stock has faced pressure due to disappointing data from late-stage studies for its next-generation obesity candidate, CagriSema [10]. Group 2: Viking Therapeutics (VKTX) - Viking Therapeutics is a clinical-stage biotech firm with its investigational drug VK2735 showing blockbuster potential for obesity treatment [2][11]. - The company is conducting a phase II study on the oral formulation of VK2735, with data expected in H2 2025, and plans to start a late-stage study on the subcutaneous version in Q2 2025 [12]. - Viking is expanding its obesity pipeline and plans to file for an investigational new drug application for a novel obesity treatment later this year [13]. - The company is also exploring partnerships for its pipeline candidates, which could provide additional funding [14]. - VKTX is expected to experience a 120% widening of loss per share in 2025 due to the lack of marketed products [16]. Group 3: Financial Estimates and Valuation - The Zacks Consensus Estimate for Novo Nordisk's 2025 sales and EPS indicates a year-over-year increase of approximately 14% and 17%, respectively [15]. - In contrast, VKTX's loss estimates for 2025 and 2026 have widened over the past 60 days [16]. - Year-to-date, NVO shares have declined by about 22%, while VKTX shares have dropped by 33%, compared to a 6% decline in the industry [18]. - Novo Nordisk's shares trade at a price/book (P/B) ratio of 15.46, significantly higher than VKTX's 3.58, indicating a more expensive valuation for NVO [19]. Group 4: Investment Considerations - Both companies hold a Zacks Rank 3 (Hold), making it challenging to choose one over the other [23]. - Novo Nordisk is characterized as a financially robust, dividend-paying blue-chip stock with strong revenue growth driven by demand for its products [23]. - Viking Therapeutics faces challenges due to its lack of marketed drugs and competition from established pharmaceutical companies, making NVO a safer investment choice despite its higher valuation [24].