80% of Wegovy Pill Users Never Took a Weight Loss Drug Before. Does This Number Change the Entire Novo Nordisk Bear Case?
Key Points
Novo Nordisk has reported strong initial sales for the pill-based version of its GLP-1 weight loss drug, Wegovy.
Sales do not appear to be coming at the expense of Novo's previously released injectable Wegovy products.
This could lead to better-than-expected results in the coming quarters even as competition heats up.
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Novo Nordisk (NYSE: NVO), previously the early mover in the GLP-1 weight loss drug space, has lost its edge as competitor Eli Lilly has come to dominate the market. However, could Novo have an ace in the hole with the recently released pill-based version of its flagship weight loss drug, Wegovy?
As CEO Mike Doustdar noted in a recent interview, 80% of Wegovy pill patients are new to weight loss drugs. This suggests the company is capitalizing on patients interested in weight loss treatment but who have been hesitant to try such treatments in their injectable form.
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Does this change the story for the out-of-favor name among GLP-1 stocks? Let's find out.
Image source: Getty Images.
Wegovy pill: a silver bullet for Novo Nordisk?
Launched in January, the Wegovy pill generated $355 million in sales during the first quarter.Contrary to initial concerns that this pill would cannibalize the company's existing market share, Novo appears to be expanding the total addressable market with its launch.
That's not all. As Jamey Millar, executive vice president of Novo Nordisk's U.S. operations, noted on the company's Q1 conference call, the Wegovy pill is also gaining share from patients who previously used competing products.
What this means for the bear case
At first, you may think that Novo's latest edge will quickly disappear as well. After all, back in April, Eli Lilly launched its own pill-based GLP-1, orforglipron, marketed as Foundayo. However, so far, Foundayo has yet to gain much traction. As a result, Novo Nordisk just raised its 2026 guidance, based on the expectation that Foundayo's launch will not affect further growth for the Wegovy pill.
Even if the Wegovy pill helps to drive only better-than-expected results moving forward, it could still have a big impact on Novo's future stock price. With shares trading under 13 times forward earnings, investors are expecting the company's earnings to keep declining. However, if declines flatten or Novo returns to a wave of overall growth, this could spark a rebound for the pharmaceutical stock, which has fallen by over 40% in the past year.
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Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
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