The Wegovy pill, a weight-loss treatment launched by Danish drugmaker Novo Nordisk, is upending the competitive landscape of the global anti-obesity drug market as it posts explosive early demand in the United States. Observers say a new competitive phase has opened in which obesity drugs, once centered on injections, are shifting to oral formulations.
According to healthcare data company IQVIA, more than 300,000 prescriptions for the Wegovy pill were written in the United States from its U.S. regulatory approval in Dec. to the end of Feb. this year. The drug is currently available only in the United States and posted an average weight-loss rate of about 17% in clinical trials. Brian Lian, CEO of biotech company Viking Therapeutics, called it "one of the fastest new drug rollouts in pharmaceutical history."
The success of the Wegovy pill is giving Novo Nordisk, which had struggled amid intensifying competition, a crucial chance to turn things around. Novo Nordisk earlier pioneered the obesity drug market based on its diabetes treatment Ozempic, at one point recording the highest corporate value in the global pharmaceutical industry, but recently faced setbacks from fiercer competition, successive clinical failures, and pipeline pruning. Over the past year, the company's share price has fallen more than 50%, surrendering its No. 1 spot in European market capitalization and now trailing AstraZeneca, Roche, and Novartis.
By contrast, rival Eli Lilly and Company surged in the obesity drug space over the same period, vaulting to a $1 trillion corporations in market value. Its homegrown tirzepatide, sold as the obesity treatment Zepbound and as Mounjaro, has become the world's second best-selling medicine. As of last month, Lilly's obesity drug prescriptions totaled about 1.4 million. That is 1.5 times Novo Nordisk's prescriptions (about 924,000).
Competition between the two companies is expected to intensify in the oral obesity drug institutional sector going forward. Until now, most obesity treatments have been premised on injections, but as pills are developed, easier administration is expected to expand the market. Lilly is also developing an oral obesity drug, "Orforglipron," with U.S. regulatory approval expected in Apr. This drug reportedly showed an average 12.4% weight-loss effect in clinical trials.
Novo Nordisk is also seen to have significantly improved past supply issues during the Wegovy pill's rollout. In the early 2024 Wegovy launch, supply hiccups caused disruptions, but the company has recently expanded manufacturing capacity and built direct sales channels such as its website. Evan Seigerman, an analyst at BMO Capital Markets, said, "The successful launch of the Wegovy pill shows Novo Nordisk has learned from past mistakes," adding, "However, the key is to regain market share before Lilly's pill wins approval."
Structural challenges are another task the company must overcome. The core patent on semaglutide, the key ingredient in Wegovy and Ozempic, is set to expire in 21 days in 10 countries, including Brazil, China, India, South Africa, Türkiye, and Canada. According to the investment banking industry, in Brazil alone 11 manufacturers have applied for approval to produce generic obesity treatments, and in India about 40 companies are expected to join the competition. This is why prices could drop by as much as half.
There are also competitive factors in product characteristics. The Wegovy pill must be taken on an empty stomach, and food intake is restricted for at least 30 minutes after dosing, whereas Lilly's Orforglipron reportedly has no such restrictions. However, Novo Nordisk CEO Lars Fruergaard Jørgensen has said, "If you take the medicine and then have your morning shower and get ready, 30 minutes will have passed, so it's not a major inconvenience."
Meanwhile, the industry holds a positive view that the launch of oral formulations will draw in new customers and expand the market. Goldman Sachs said in a recent report that early demand for the Wegovy pill came mainly from new patients rather than existing injection users, offering an optimistic outlook that oral obesity drugs will drive market expansion rather than cannibalize the existing market.
However, the larger the market grows, the fiercer the competition is likely to become. Marek Poszepczynski, a partner overseeing a biotech investment fund at global asset manager Schroders, said, "To survive in the market, you need clear points of differentiation that stand up to rival products," adding, "Without differentiation, even if you jump into the competition, you will not survive."