Eli Lilly vs Novo Nordisk: The 1 Figure Investors Shouldn't Ignore

Over the past few years, Eli Lilly (NYSE: LLY) and Novo Nordisk (NYSE: NVO) have been dominating one of the biggest growth markets in the pharma industry: the weight loss drug market. Demand for these drugs has soared -- even resulting in product shortages at times -- and analysts expect the market to reach nearly $100 billion by 2030.

Novo was first to market with semaglutide, commercialized as Ozempic for type 2 diabetes and Wegovy for weight loss. Lilly then joined the market with tirzepatide, sold as Mounjaro for type 2 diabetes and Zepbound for weight loss. Both are part of the class of drugs known as GLP-1, a type of product that acts on hormones involved in blood sugar and appetite management.

Now, as we consider these two rivals, there's one figure investors shouldn't ignore. Let's check it out.

Image source: Getty Images.

Novo's first approval

First, though, we'll take a quick look at the Lilly and Novo story so far. As mentioned, Novo was first to market with its injectable weight loss drugs, and these products have delivered significant growth since their market launches -- Ozempic won approval back in 2017 and Wegovy in 2021.

It's often difficult for a new player to compete with such successful products, but Lilly managed to do this very well. The company won approval for Mounjaro and Zepbound in 2022 and 2023, respectively. It's been successful for a number of reasons. First, demand for these sorts of drugs is so strong that there is room for more than one player to succeed. Beyond that, though, Lilly made manufacturing investment a priority to ensure it has what it takes to serve demand.

And the company showed through a head-to-head study that Zepbound may be superior in efficacy to Wegovy. In that study, Zepbound led to average weight loss of more than 20% compared to more than 13% for the Novo drug. This was after a period of 72 weeks.

Lilly gains market share

All of this has helped Lilly gain in market share. And this brings me to the number that investors shouldn't ignore. In the U.S. incretin analog market -- this refers to GLP-1 drugs -- as of May 2024, Lilly began gaining market share while Novo started losing share. The trend continued until Lilly took leadership of the market about a year ago, and today, Lilly holds more than 60% of the market. That's compared to about 39% share for Novo.

The number is important, but what's even more significant is the trend. This isn't just a temporary move but a progressive shift toward Lilly's weight loss drugs. And that suggests more growth in revenue and stock performance may be ahead for this pharma giant.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.