Novo Nordisk: Retail Traders' Long-Term Growth Bet Amid Lilly's Market Dominance

Eli Lilly and Novo Nordisk continue to dominate the GLP-1 obesity market, but their competitive positions and market sentiment are diverging sharply. Lilly secured a commanding 57% market share in the first half of 2024, largely driven by Zepbound's performance, while Novo Nordisk's sales grew at a more modest 18% pace, a figure low enough to prompt a lowered 2025 guidance. This divergence extends to their core revenue streams: Novo Nordisk's diabetes and obesity segment generated $10.4 billion in H1 2024, slightly ahead of Lilly's cardiometabolic health segment at $9.2 billion. However, clinical trial outcomes show Lilly's Zepbound achieving a 20.2% average weight reduction compared to Wegovy's 13.7%, providing a scientific edge in efficacy.

Manufacturing investments underscore the competitive scaling race, with Novo acquiring Catalent and Lilly pouring $4 billion into U.S. facilities. Yet, Novo faces supply constraints and weaker trial data for its CagriSema candidate, while Lilly contends with declining Trulicity sales. Regulatory hurdles loom for both, particularly around FDA approvals for oral formulations – Novo seeks approval for a daily tablet while Lilly reported mixed phase 3 results for its orforglipron, which achieved only 12.4% weight loss. Emerging rivals like Amgen and Viking Therapeutics further intensify competitive and regulatory risks as the market targets $100 billion by 2030.

Retail sentiment reflects this competitive tension. Stocktwits polls show 32% of traders expressing optimism for Eli Lilly, contrasting with a 43% decline in sentiment for Novo Nordisk. Smaller players like Hims & Hers saw even more dramatic sentiment swings, surging +81% year-to-date. Lilly's momentum is fueled by strong Q3 sales of Zepbound and Mounjaro, plus anticipation for its oral GLP-1 pill. Novo, despite advancing its own oral semaglutide development and securing TrumpRx pricing deals to lower costs, struggles to regain retail confidence amid slower growth and profit reductions. This sentiment gap highlights how retail traders are pricing in Lilly's near-term clinical and market share advantages more favorably than Novo's established market position.

Market enthusiasm for Lilly remains sensitive to clinical data, as seen when its stock dipped following mixed trial results for orforglipron. Meanwhile, Novo's supply chain challenges and weaker CagriSema data continue to weigh on investor perception. Both companies navigate significant regulatory risks from potential Trump-era tariffs and pricing pressures under initiatives like TrumpRx, which could compress margins across the industry. The competitive battle intensifies as both firms race toward oral delivery systems and new drug candidates, with Lilly currently holding stronger clinical and sentiment advantages despite Novo's slight revenue lead in the core diabetes/obesity segment.

Growth Catalysts and Retail Preference Drivers

Retail traders show tempered optimism towards Novo Nordisk, despite facing strong headwinds from Eli Lilly's market dominance and Novo's own recent stock dip. This interest stems from several key, long-term strategic advantages that position Novo as a resilient player in the booming weight-loss drug sector. A projected market size of $37.1 billion by 2031 represents the massive opportunity driving this focus, even as current competition intensifies. Crucially, Novo is aggressively pursuing oral semaglutide, aiming to secure FDA approval for a daily tablet. This potential launch could give Novo a decisive edge in the highly competitive oral GLP-1 space, directly challenging rivals like Lilly and Viking Therapeutics, whose VK2735 drug secured a major $150 million manufacturing deal to scale production.

Furthermore, Novo is actively engaging with the TrumpRx initiative. These pricing deals aim to lower drug costs and expand patient access, potentially mitigating future margin pressures from regulatory or policy shifts. This proactive approach could insulate the company from some of the pricing risks looming over the industry. However, significant challenges persist. Eli Lilly currently holds a commanding 57% market share in the GLP-1 category for H1 2024, a substantial lead that underscores Novo's uphill battle. While Novo reported 18% sales growth, the company recently lowered its 2025 guidance, reflecting ongoing execution pressures. Additionally, the competitive landscape remains fierce; Viking Therapeutics, backed by its substantial manufacturing partnership, continues to develop VK2735, adding another potential competitor to the market. Regulatory scrutiny over drug pricing under initiatives like TrumpRx also remains an unresolved risk that could impact profitability. Despite these headwinds, the combination of a vast, growing market, Novo's advanced oral pill development pipeline, and its engagement with cost-reduction strategies fuels a long-term investment thesis for some retail traders, betting on Novo's ability to leverage these advantages to close the gap on Lilly.

Regulatory and Competitive Risks

Despite these growth drivers, Novo Nordisk faces mounting competitive and regulatory headwinds that could erode its market dominance. Eli Lilly's Zepbound is directly challenging Novo's weight-loss leadership, with clinical trials showing it achieved 20.2% average weight reduction versus Novo's Wegovy at 13.7% according to clinical data. This performance gap could shift patient and insurer preference toward Lilly's drug, especially as both companies reduced cash prices to maintain affordability.

New entrants are intensifying pressure in the rapidly expanding obesity drug market. Viking Therapeutics secured $150 million for manufacturing its dual GLP-1/GIP candidate VK2735, aiming to compete with Novo and Lilly. While Viking's stock has faced volatility, its manufacturing partnerships signal growing competition. Emerging rivals like Amgen are also advancing GLP-1 therapies, creating regulatory and supply chain frictions that could disrupt Novo's growth trajectory.

Regulatory uncertainty compounds these risks. The FDA's permissive stance on compounding semaglutide and tirzepatide at lower costs threatens branded drug exclusivity across the GLP-1 space. By allowing pharmacy compounding without equivalent manufacturing oversight, regulators risk undermining pricing power and quality standards in this $100 billion market. These combined pressures – clinical competition, new entrants, and regulatory shifts – create execution uncertainties that could slow Novo's growth even as demand surges.

Execution and Valuation Implications

Retail traders remain firmly bullish on Eli Lilly despite competitive headwinds, signaling conviction in its sustained market leadership despite valuation discounts. A Stocktwits poll shows 32% of retail traders favor Lilly over Novo Nordisk and smaller rivals, driven by Zepbound and Mounjaro's strong Q3 sales. This optimism is reflected in stock performance, with Lilly up 21% year-to-date compared to Novo Nordisk's 43% decline. Hims & Hers also saw dramatic retail enthusiasm, surging 81% as it expands telehealth access to GLP-1 treatments. However, this conviction exists alongside real execution challenges. Lilly faces declining Trulicity sales according to financial reports, while Novo Nordisk battles supply constraints and weaker clinical data for its CagriSema program, undermining its defensive position. Regulatory risks further complicate the landscape; Novo's TrumpRx pricing deals aim to reduce patient costs but could compress margins industry-wide.

The market's projected $100 billion size by 2030 intensifies pressure on both giants. Novo's diabetes and obesity segment generated $10.4 billion (94% of total sales), while Lilly's cardiometabolic health segment reported $9.2 billion (72% of revenue). Yet, Lilly's Zepbound outperformed Novo's Wegovy in weight loss trials (20.2% vs. 13.7% reduction), eroding Novo's scientific lead. Emerging rivals like Viking Therapeutics (VK2735) and Amgen add pipeline competition, though Viking's "class-leading" results remain early-stage. The valuation gap widens as investors weigh these operational frictions against growth potential. Next quarter, Lilly's oral semaglutide FDA decision and its oral pill launch represent critical catalysts that could decisively shift the obesity drug market dynamics. Until then, execution risks and margin pressures under TrumpRx loom large, tempering the appeal of even the most promising growth stories.