28% plunge vs counter trend rise! The Truth Behind the GLP-1 Duel (Lilly, Novo Nordisk)

Let's talk about Novo Nordisk first.

Their core product, semaglutide (also known as Wegovy and Ozempic), is currently being pursued by Eli Lilly's Zeppound/Mounjaro.

The long-term weight loss effect of Terpotide is already very close to Novo Nordisk's next-generation drug CagriSema - the former can lose 22.9% weight at 176 weeks, while the latter can lose 22.7% weight at 68 weeks. In addition, Lilly also has a three target Retatrutide, which can lose 24% weight at 48 weeks, making it significantly more technically advantageous.

More importantly, Eli Lilly's oral small molecule GLP-1 drug Orforglipron has completed phase III trials and can lose 7.3 kilograms in 40 weeks. It is expected to submit its market application by the end of the year.

Although Novo Nordisk's oral semaglutide has also submitted an application, the progress has significantly slowed down.  

The Phase III data of CagriSema actually did not meet expectations. The original goal was to lose 25% weight, but the results were poor, and patients' tolerance to high doses was not as expected - only 57% of people could accept the highest dose, while the control group had 70%.

The market naturally raises questions about its commercialization prospects.   

The impact of generic drugs is also fierce.

In the US market, the price of illegally compounded GLP-1 drugs is only half or even one-third of that of Wegovy. Although the FDA is tightening its control, it has already diverted many users.

The situation in China is even more evident, with similar drugs from local pharmaceutical companies such as Xinda Biotech priced much lower, directly squeezing Novo Nordisk's space.   

The pressure of policy and medical insurance price reduction is also significant.

Wegovy and Ozempic have been included in the US healthcare negotiation list for 2027, and based on the previous example of Januvia's 79% price reduction, these two drugs are likely to face significant price cuts.

Novo Nordisk also voluntarily lowered the price to $499 per month, a decrease of 63%, which directly reduced the gross profit margin from 84% to 78%.  

 

In the second quarter of 2025, its sales revenue was 76.86 billion Danish kroner, a year-on-year increase of 18%. However, the expected sales growth for the whole year has been lowered from 13% -21% to 8% -14%, and the expected operating profit growth has also been reduced from 16% -24% to 10% -16%.

Even more troublesome is that semaglutide accounts for 71% of the company's revenue, and this "one seedling" structure is too easily impacted.   

On July 29th, the stock price suddenly fell by 26%, hitting a new low of two and a half years, and the technical bearish signal was very clear.

Although the current valuation is not considered high (forward P/E ratio of 18.47 times, much lower than the industry average), with two CEO changes within a year, it is still uncertain whether the new management can stabilize the situation.    

Looking at Lilly again, its ability to go against the trend and strengthen is still supported by its products and pipelines.

The sales data of Tilpotide is too impressive - it sold $5 billion in the first quarter of 2025, accounting for 39% of the company's revenue, with a year-on-year growth rate of over 100%.

Currently, Eli Lilly accounts for 53.3% of the prescription volume in the US intestinal insulin market, surpassing Novo Nordisk.

Moreover, Tilpotide not only has a significant weight loss effect, but also has a good hypoglycemic effect. A1C can be reduced by 1.3-1.6 percentage points, and the user acceptance is very high.   

The Orforge lipon mentioned earlier not only reduces weight, but also has a stable hypoglycemic effect. Once it is launched, it is likely to become the first approved oral small molecule GLP-1 drug.

The Retarutide with three targets is more powerful, with Phase II data showing a weight loss of 24.2% after 48 weeks. The Phase III data was released earlier this year, and many people believe that it may become the next generation of "drug kings".  

There is no financial pressure either.

In the first quarter of this year, Lilly's revenue was 12.729 billion US dollars, an increase of 45.17% year-on-year, and its net profit was 2.759 billion US dollars, an increase of 23.02%, indicating sufficient cash flow.

The average target price given by analysts is $1035.29, which is higher than the current stock price, indicating that the market still has confidence in it in the long run.

Moreover, its drugs have not yet been included in the medical insurance negotiations, and with direct contact with patients through the Lilly Direct model, it avoids middlemen's price pressure and has a more stable profit margin.   

Tilpotide has been rapidly approved for listing in these domestic markets, avoiding direct price wars with local pharmaceutical companies and seizing the opportunity. The R&D investment is also generous - the R&D investment in the GLP-1 field accounts for 18%, which is much higher than the 12% invested by Pinot and Nord, and the technological iteration is naturally faster.    

Ultimately, the GLP-1 drug market has entered a new stage of technological iteration and price war.

Lilly is one step ahead with multi-target and oral drugs, and if Novo Nordisk cannot quickly push CagriSema and oral formulations to the market, its market share may still be squeezed.

Moreover, the patent for semaglutide will expire in 2026, and once generic drugs are released, the price may drop to $200-400 per month. Novo Nordisk needs to quickly make up for these new indications and emerging markets in cardiovascular disease.   

The impact of the macro environment is also different. The depreciation of the US dollar against the Danish krone directly affected Novo Nordisk's financial data, while Eli Lilly, as an American company, was much less affected by exchange rates.

If the Federal Reserve cuts interest rates, although it can reduce the financing costs of pharmaceutical companies, short-term market fluctuations are still inevitable. Eli Lilly has stronger cash flow and greater risk resistance.    

Overall, the decline in Novo Nordisk's stock price this time is a combination of competitive pressure, lower than expected research and development, policy pressure, and financial downturn.