Filed under: Sector Trends
2025 Recap: The Defender vs. The Challenger
Eli Lilly (LLY) is a US Big Pharma giant. Traditionally strong in diabetes, oncology, and immunology, it’s now showing almost absurd momentum in obesity and metabolic disease.
Lilly was technically a late entrant to the obesity race, but it didn’t act like one. In 2025, Mounjaro (diabetes) and Zepbound (obesity) surged with 100%+ year-over-year growth, driving repeated earnings beats across Q1, Q2, and Q3.
Novo Nordisk (NVO) is a Danish pharma powerhouse and the long-time king of diabetes. Novo effectively opened the modern obesity market with Ozempic and Wegovy, building one of the strongest brands in healthcare.
But 2025 wasn’t smooth for Novo. Lilly’s acceleration was relentless, and at one point Novo even lost the lead in the obesity race, shaking investor expectations. Growth didn’t collapse, but the story shifted from “unstoppable” to “under pressure.”
The Real Battlefield: GLP-1 (And What Comes After)
GLP-1 is a hormone that helps regulate appetite and blood sugar. GLP-1 drugs reduce hunger, improve glucose control, and have become the biggest medical “unlock” in obesity treatment in decades.
Lilly’s Edge: Dual-Action Firepower
Lilly’s Mounjaro/Zepbound are based on tirzepatide, which targets GLP-1 + GIP (a dual-hormone approach). Many investors view Lilly as gaining ground because:
Weight-loss efficacy has looked extremely strong in real-world and clinical comparisons.
Demand in both diabetes and obesity is exploding.
Lilly is perceived as better positioned to scale supply (a key constraint in this market).
Novo’s Counterpunch: The Pill Changes the Game
Novo’s Wegovy (semaglutide) essentially defined the category in the US after launching in 2021.
The big twist heading into 2026: an oral (pill) version becomes a major catalyst. If the market shifts from “injections only” to a mixed injection + pill era, the addressable market expands fast because many patients hesitate at needles.
Bottom line: 2026 is not just a “who has the better injection” contest anymore. It’s a platform war: injections plus pills, and next-generation molecules waiting in the wings.
Differentiation and 2025 Stock Narrative
Eli Lilly: Fundamentals + Confidence
Lilly’s 2025 story is clean: revenue and EPS kept rising, then Q3 became the ignition point. Management reportedly raised full-year 2025 guidance meaningfully:
With market share approaching ~60% in its key obesity/diabetes franchise, the stock pushed through the psychological $1,000 level. What’s striking is that even after the run, the P/E compressed from about 65 early in the year to around ~52.5, implying the market is still balancing growth vs. valuation rather than being blindly euphoric.
Novo Nordisk: Strong Business, Weaker Narrative
Novo’s five-year run was legendary, but 2025 hit the brakes. The stock fell sharply from its highs (down to about 60% of the early-year peak), not because the business collapsed, but because investors started pricing in:
Slower growth versus Lilly’s pace.
Questions around pipeline momentum and guidance narrative.
Competitive pressure in obesity leadership.
Yet Novo still showed meaningful strength operationally. Revenue growth remained solid (~18% in H1) and operating margins stayed extremely high (~44%). The issue wasn’t “Novo is broken.” It was “Is Novo still the clear winner?”
2026 Outlook: How the Next Round Could Be Decided
Lilly in 2026: The Machine Keeps Running
Lilly doesn’t have an obvious near-term “cliff” in this narrative. Even if competition intensifies, it has multiple shots on goal:
Orforglipron: An oral GLP-1 candidate as a pill response.
Retatrutide: A triple-hormone pathway approach as a potential next-generation leap.
Pipeline Depth: A deep broader pipeline (Alzheimer’s, oncology, immunology) supporting a premium valuation.
That’s why even at a P/E far above the healthcare average, many investors still don’t view Lilly as “obviously expensive.” They’re paying for execution plus pipeline depth.
Novo in 2026: Rebound Setup, But Execution Matters
Novo’s setup is different: it’s coming into 2026 after a painful reset, which creates room for re-rating if it executes well. Key pressure points include:
Pricing dynamics (including government-driven pricing pressure).
Timing and uptake of the oral option.
Progress on next-gen candidates like amycretin (positioning toward multi-hormone competition).
Even if Novo doesn’t “win” outright versus Lilly, obesity is a massive and expanding market. The company can still grow strongly. But stock performance depends on expectations, not just “good results.”
What to Watch (The Checklist That Actually Matters) ✅
If you’re tracking this space in 2026, these are the levers that can move the narrative:
Pill Adoption: How big does the pill-driven obesity market become after launch?
Supply Chain: How quickly do supply bottlenecks ease? (capacity, fill-finish, distribution)
The Timing Race: Novo’s oral ramp vs. Lilly’s oral approval timeline.
Next-Gen Showdown: Dual vs. triple agonists and real-world tolerability.
Sustained Adherence: Weight-loss maintenance, discontinuation rates, and side-effect management.
Epilogue
2026 is the year obesity treatment expands from an injection-only battle into a two-front war: injections plus pills.
That naturally splits the narrative:
Lilly looks like the company with momentum plus “next cards” already in motion.
Novo looks like the company that took a 2025 hit, but may have the cleanest rebound catalyst if oral uptake is strong.
The real point isn’t just picking a “winner.” It’s recognizing that obesity is increasingly treated like a manageable medical condition, not a lifestyle footnote. That shift is the tide. Lilly and Novo are currently the biggest ships riding it.
Disclaimer: This post is for educational purposes only and is not financial advice. Investing involves risk.
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