Weight Loss Drug Duel: Novo Nordisk's Crushing Defeat to Eli Lilly, Stock Price Crashes Overnight!

A major shakeup in the global pharmaceutical industry.

The worldwide weight-loss drug leader, Novo Nordisk, experienced an epic plunge due to its new drug underperforming compared to competitor Eli Lilly.

On Monday’s close, Novo Nordisk’s stock dropped over 16%, hitting its lowest point since June 2021, with market capitalization shrinking significantly to $176.9 billion.

In contrast, Eli Lilly’s stock rose 4.8% on the back of an upgraded weight-loss drug, bringing its total market value to $998.6 billion.

Novo Nordisk’s Defeat

The main players in this weight-loss drug showdown are: Novo Nordisk’s CagriSema and Eli Lilly’s Zepbound.

However, this battle ended with Novo Nordisk’s defeat.

According to a statement from Novo Nordisk, participants treated with the standard dose of the experimental drug CagriSema lost 20.2% of their body weight after 84 weeks.

By comparison, Eli Lilly’s Tirzepatide achieved a weight loss of 23.6%.

CagriSema is a combination drug developed by Novo Nordisk, containing the long-acting amylin analog Cagrilintide and the GLP-1 receptor agonist semaglutide.

In December last year, Novo Nordisk submitted an approval application for CagriSema to the FDA, with a decision expected by the end of 2026.

Novo Nordisk originally hoped CagriSema would become a strong successor to their existing drug Wegovy (patent expiring after 2030), helping them regain leadership in the weight-loss market.

Although the trial results were not as good as Eli Lilly’s, CEO Mike Døstdar remains highly optimistic about CagriSema.

Novo Nordisk is exploring additional trial plans, including higher-dose combination regimens for CagriSema.

Notably, in early February, the company issued guidance for 2026 that significantly fell below market expectations.

They forecast full-year sales to decline by 5% to 13% at constant exchange rates, far exceeding analysts’ expected decline of about 1.4%.

This marks the first time in nine years that Novo Nordisk has projected a decrease in annual revenue.

Mike Døstdar admitted that in 2026, Novo Nordisk will face “unprecedented pricing pressures,” especially as the blockbuster weight-loss drug Wegovy is expected to see price cuts in the U.S., which will be very “painful” for the company’s finances.

Is the Weight-Loss Drug Landscape Changing?

Meanwhile, Eli Lilly is making rapid progress.

On Monday, Lilly launched a new formulation of its flagship weight-loss drug Zepbound, which provides a month’s dose in a single pen.

The starting price for the lowest dose is $299 per month.

Since its launch at the end of 2023, Zepbound demand has exploded, helping Lilly capture most of the weight-loss drug market share from Novo Nordisk.

In the fourth quarter, Zepbound generated $4.2 billion in U.S. revenue, a 122% increase year-over-year.

Lilly stated that the FDA has approved expanding Zepbound’s label to include multi-dose devices.

Tirzepatide, the active ingredient in Lilly’s Mounjaro and Zepbound, has already surpassed Novo Nordisk’s semaglutide (marketed as Ozempic and Wegovy) in the U.S. prescription market.

According to Lilly’s 2025 financial report, Tirzepatide contributed $36.5 billion in revenue, surpassing Novo Nordisk’s semaglutide to become the “drug king” globally in 2025.

Specifically, the diabetes version of Tirzepatide achieved $22.97 billion in sales, up 99% year-over-year; the weight-loss version reached $13.54 billion, up 175%.

JPMorgan analysts expect Lilly’s Zepbound to have a longer growth window beyond 2026.

“This confirms that Zepbound is currently the clear market leader, and Lilly will continue to expand its share. Although CagriSema may produce more competitive products, we believe it will be difficult to take market share from Lilly.”

Truist Securities analysts note that CagriSema remains a potent drug and will continue to monitor more trial data, but current data suggest Lilly will dominate the obesity market in the short term.

“Lilly’s products have the best efficacy, and with improved channels, supply, and growing demand, they will solidify their position.”

“While waiting for detailed data, we note that Tirzepatide’s discontinuation rate is lower than semaglutide; based on existing data, CagriSema is unlikely to surpass Tirzepatide in safety.”

Baird analysts expressed skepticism about CagriSema’s ability to directly compete with Lilly, citing manufacturing challenges and limited advantages over Tirzepatide.

Additionally, Lilly’s next-generation drug, retatrutide, which has higher efficacy, is likely to launch around the same time, potentially further shrinking Novo Nordisk’s prospects.

“This trial highlights that Novo Nordisk still faces challenges, while Lilly always manages to withstand any offensive from Novo Nordisk.”