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As its obesity medication Wegovy loses a sizable portion of the market to Eli Lilly and Company (NYSE:LLY)'s competing medicine, Zepbound, the Danish pharmaceutical behemoth Novo Nordisk A/S (NYSE:NVO) abruptly announced the resignation of veteran CEO Lars Fruergaard Jørgensenm last week. The stock has dropped by over 49% in the past year, wiping out over $300 billion, whereas Eli Lilly's stock has shot up by around 800% since Dave Ricks, the company's current CEO, took over in January 2017.
An elderly couple receiving insulin from a pharmacist, representing healthcare company's successful pharmaceutical products.
After Wegovy's debut, Eli Lilly and Company (NYSE:LLY)'s Zepbound quickly gained popularity, topping Wegovy prescriptions in the United States by March 2024 and gaining an estimated 40% of the market for weight reduction medications by August. According to Bernstein analyst Courtney Breen, Zepbound is preferred by physicians as well as patients since it has been shown in clinical trials to provide higher weight loss than Wegovy. Investors were disappointed when Novo Nordisk A/S (NYSE:NVO)'s next-generation obesity medication, CagriSema, which was supposed to emerge in 2026, failed to achieve the weight loss goals they had hoped for.
The firm also has to deal with the Trump administration's proposed tariffs on imported drugs, Medicare drug price debates, growing generic competition, and the upcoming patent expirations for Wegovy. The latest licensing agreements for early-stage candidates like Amycretin and others bought from Septerna and United Laboratories International show the company's transition away from peptide-based medications and toward oral small-molecule obesity therapies.
Analysts continue to exercise caution regardless of these attempts. According to Evan Seigerman of BMO Capital Markets, Novo Nordisk A/S (NYSE:NVO)'s future is uncertain in the absence of a significant strategic shift. To regain its leadership in the obesity treatment market, the business's unannounced new CEO will need to speed drug introductions, bridge the gap with Eli Lilly, and negotiate changing regulatory and competitive landscapes.
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