Novo Nordisk Wegovy pill beating Eli Lilly Foundayo early
Still life of new Wegovy semaglutide tablets on white background. It is a prescription medication used in conjunction with a reduced-calorie diet and physical activity.
Michael Siluk | Universal Images Group | Getty Images
When the Wegovy pill launched in January, telehealth provider LifeMD said: business doubled almost overnight.
CEO Justin Schreiber said LifeMD has gone from seeing 300 to 400 new patients a day to 600 to 1,000 new patients a day. He knew there would be demand, but he was surprised by this level of interest.
“There is no question that the introduction of oral medications has improved access,” Schreiber said.
Tens of thousands of people have begun taking Novo Nordisk’s Wegovy pill in the four months since its launch in the United States, the majority of whom are new to the GLP-1 category. Investors will get a fresh look at the Wegovy pill’s momentum when Novo reports first-quarter results on Wednesday.
The launch has already forced investors to rethink HEopportunity in oral GLP-1s and which company can win it. While obesity and diabetes market leader Eli Lilly launched its own pill, Foundayo, last month, early signs suggest its launch is more modest than the Wegovy pill’s debut.
“We were all in the Foundayo, Foundayo, Foundayo camp because Lilly was talking about it and we were worried about making enough peptide because Novo was still coming out of shortage,” said Evan David Seigerman, an analyst at BMO Capital Markets.
Novo’s initial success raised expectations among some investors and analysts, who expected the Danish company to lag its U.S. rival in the oral category as well as injectable products.
Novo’s Wegovy pill uses the same main ingredient as its weekly shot. The company had at times struggled to produce enough peptides to meet growing demand for injections, and the oral formulation required more than that. Lilly, meanwhile, was telling investors that its GLP-1 pill was easier to make and wouldn’t face the deficiencies that hampered shots.
Doubts about Lilly’s lock on the market were raised last summer when the company said the pill helped people lose an average of 12% of their body weight. Seigerman recognized that Novo was seizing the opportunity and began highlighting the effectiveness of oral semaglutide, the active ingredient in Novo Wegovy, which produced almost 17% weight loss in a separate trial.
When the Wegovy pill was approved around the New Year, Novo and its telehealth partners launched a high-profile promotional campaign. Advertisements blanketed New York City subways and broadcast TV. The Danish drugmaker even tapped celebrities like DJ Khaled for its first Super Bowl commercial.
Novo touted the pill’s low entry price of $149 per month and its injection-like effectiveness. The company used its three-month advantage over Lilly to shape the narrative and combat concerns that people wouldn’t want a pill that had to be taken first thing in the morning, without food and with little water; Novo CEO Mike Doustdar said this was “a little bit fueled by our competition.”
“Well, I have news for you, that is absolutely not the case,” Doustdar told CNBC in March. “People are really interested because it’s the most effective pill on the market right now.”
The Wegovy pill — and now Lilly’s own oral medication — is helping expand the market for GLP-1, reaching patients who might not otherwise seek treatment due to fear of needles or difficulty accessing injections; This used to be much more expensive than today’s pills for many patients.
“There are a lot of patients who don’t want to get stuck with a needle or be influenced by the price in a vial and syringe situation,” Jamey Millar, Novo’s president of U.S. operations, said in a March interview.
CEO Michael Botta said people prefer GLP-1 pills “by a huge factor” over shots via telehealth platform Sesame. He attributes this preference to the lower price of pills compared to injections and the fact that people are more comfortable trying oral medications rather than going directly for injections.
This could bring a more diverse group of patients into the category. He said there are “definitely” more men starting the drugs than before, but women still make up the majority of new patients.
Shortly after launch, Novo said most early users took the lowest starting dose of the drug. Millar told CNBC that the company is closely monitoring how many patients switch to the highest dose in the coming months.
Novo vs. What to watch on Lilly?
It looks like Eli Lilly has some work to do to catch up with Novo.
While Novo managed to benefit from the awareness of the Wegovy brand from the very beginning, Lilly is trying to promote it. Introduce people to a completely new brand. The Foundayo pill has a different active ingredient than the best-selling weight loss drug Zepbound. Lilly executives last week tried to reassure investors that it would take time to introduce the drug to doctors and patients.
More than 20,000 people in the first few weeks of launch Lilly CEO Dave Ricks said in a statement to CNBC after the company’s first quarter earnings report that he has started buying Foundayo. More than 1,000 people start medication every day, he said, and 80% of those patients are new to GLP-1 medications. Lilly still needs to raise consumer awareness about the pill, Ricks said, adding that the company hasn’t started advertising it widely on television.
“So what we’re seeing right now is basically organic demand, and that’s really strong for us,” Ricks said.
RBC analyst Trung Huynh said investors should wait two or three months to evaluate the momentum of Lilly’s Foundayo launch because there is so much volatility early on. He thinks it will take a year or two for the story to play out. Weekly noted the vaccine market: Zepbound prescriptions surpassed Novo’s Wegovy prescriptions six months after Zepbound launched in the U.S., even though it was introduced two years later.
Barclays analyst Emily Field said Lilly should ease some pressure on Foundayo prescriptions in the short term as it strongly raised its full-year sales forecast across its GLP-1 business. The company plans to begin introducing Foundayo to other countries later this year and has touted the pill as the key to reaching people around the world.
Novo has not disclosed any details about the potential launch of its Wegovy pill outside the US, but in March it announced a $500 million manufacturing investment in Ireland to meet current and future demand for its oral products outside the US. The European Medicines Agency is expected to approve the Wegovy pill later this year.
Investors will get a better sense of the Wegovy pill’s performance this week when the company reports earnings for the first quarter it is available for sale in the United States. Analysts praised the strength of its launch, which even outpaced its launch.
Despite this, Wall Street expects a significant decline in overall sales this quarter as generic competition for the Wegovy vaccine threatens sales in India, China and Canada. The pill’s low price could also negatively impact U.S. sales.
Investors will be on high alert for any data on the Wegovy pill and whether Novo stands by the gloomy forecast it issued in February, saying sales and profits would fall 5% to 13% in 2026. Novo’s pipeline will also be a focus. Clinic disappointments have weighed on the stock and left investors wondering whether Novo’s pipeline is rich enough to help the company stay competitive.
While pills are important to both Novo and Lilly, analysts say they won’t define either company.
“Yes, it shakes things up, but I still think Lilly has the ingredients to be successful,” BMO’s Seigerman said. “And Novo can win with this, but they need more than one win to become champions.”
