Eli Lilly (LLY) shares rose on Wednesday as rival Novo Nordisk cut its full-year sales and profit guidance, reflecting intensifying competition in the high-growth obesity drug market.
Novo Nordisk, the maker of Wegovy and Ozempic, revised its 2025 sales growth outlook down to a range of 13% to 21%, compared to its earlier projection of 16% to 24%.
The company cited slower-than-expected U.S. prescription growth for Wegovy and the impact of compounded versions of GLP-1 drugs, which have eroded market share and pressured branded drug sales.
While Novo Nordisk’s first-quarter net profit and operating income exceeded analyst expectations, sales of Wegovy fell short, and the company’s U.S. market penetration has stalled since February despite increased supply.
Novo Nordisk also slashed the price of Wegovy on its online platform in response to growing price competition, following a similar move by Eli Lilly.
The guidance cut from Novo Nordisk comes as Eli Lilly’s competing obesity injection, Zepbound, continues to see higher prescription volumes in the U.S. than Wegovy. Unlike Novo, Eli Lilly maintained its sales guidance for 2025, reinforcing investor confidence in its ability to capture market share in the obesity treatment sector.
As a result, Eli Lilly’s stock climbed, trading around $780.62, up nearly 0.7% on the day, while Novo Nordisk’s shares also rose in early trading despite the guidance cut, as investors anticipate a rebound in Wegovy sales later in the year once compounded alternatives are phased out.
The developments highlight the fierce rivalry between the two pharmaceutical giants in the fast-expanding weight-loss drug market, with Eli Lilly currently benefiting from Novo Nordisk’s more cautious outlook and competitive pressures.
Investors are closely watching prescription trends, pricing strategies, and regulatory actions as both companies vie for leadership in this lucrative therapeutic area.