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The weight-loss market began feeling some growing pains as the year ended, creating more wariness for the upcoming year. For 2025, competition and supply constraints are areas to watch.
Between Novo Nordisk's (NVO) slightly disappointing results for its latest GLP-1 candidate, CagriSema, and questions that remain about Amgen's (AMGN) highly anticipated once-monthly injectable, MariTide, some wonder if the weight-loss drug market has reached its peak.
Mizuho healthcare expert Jared Holz wrote in a note that it's doubtful "patients are seeking to lose more weight than what drugs like Zepbound and Wegovy are providing."
Zepbound, Eli Lilly's (LLY) weekly injectable weight-loss treatment, provides up to 24% weight loss, while Wegovy from Novo Nordisk provides up to 16%.
Novo's most recent clinical trial data for CagriSema showed 23% weight loss — putting it just under Lilly's ceiling for Zepbound. The company had indicated it expected higher results, and the stock slid on news of the disappointing results.
Amgen, meanwhile, reported 20% weight loss for once-monthly MariTide but saw sustained weight loss in those using the drug as a maintenance treatment with longer intervals — marking a differentiation between its drug and others on the market.
The question facing investors is whether or not Lilly and Novo can keep their lead in the market or if incoming competition from other players dilutes the market.
BMO Capital managing director Evan Seigerman told Yahoo Finance that he is less bullish on Novo than before and has taken Novo and Lilly off his top picks for the pharma sector outlook next year.
"We still like them, and the reaction last week [to CagriSema news] was a bit overdone, but we cut our price targets significantly," Seigerman said.
BMO cut its price target for Novo from $156 per share to just $105 per share.
"Lilly's GOAT status becoming more clear? Competitive landscape more challenging for Novo, but not impossible to overcome (2025 commercial execution is a great place to start)," he wrote.
Supply constraints are also something to watch after the FDA declared Lilly's shortage over this month, starting a countdown between February and March for different producers of copycat drugs. When the drugs were in shortage, compounding pharmacies were able to produce similar products without applying for approval. Now, with the shortage declared over, any drug with Lilly's key ingredient, tirzepatide — found in both Mounjaro and Zepbound — will need to halt production by early next year.