Novo Nordisk shares jump almost 8% after US approves Wegovy pill

[COPENHAGEN/LONDON] Novo Nordisk shares jumped nearly 8 per cent on Tuesday (Dec 23), after the US Food and Drug Administration approved its weight-loss pill.

This gives the Danish drugmaker a competitive edge over rival Eli Lilly in the fast-evolving market for obesity drugs.

The approval of Novo’s Wegovy pill gives the drugmaker a first-mover advantage in the race for a potent oral weight-loss medicine, as it tries to claw back market share from Lilly and compounding manufacturers.

Novo, which faced massive supply challenges after the 2021 launch of its injectable drug Wegovy, has said it is better prepared this time.

Chief executive officer Mike Doustdar said in November that the company has “more than enough pills this time”, and would go “all in” on the launch.

Its shares, which have fallen by more than half this year, were Tuesday’s biggest gainers in Europe. Lilly’s shares fell 1.2 per cent in US premarket trading.

Novo has also submitted a marketing application for the pill to the European Medicines Agency and other regulatory authorities.

Short-lived advantage

BMO Capital analyst Evan Seigerman said Novo’s advantage in capturing patients with a preference for the convenience of a pill could be short-lived, with Lilly’s orforglipron expected to be approved in 2026.

Novo stole a march on Lilly when it launched the injectable version of Wegovy, but struggled to meet demand.

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Lilly then forged ahead with its Zepbound injection, which has largely been ahead of Wegovy in weekly US prescriptions this year. Novo already sells Rybelsus, an oral semaglutide for type two diabetes.

Roche, AstraZeneca and US based Viking Therapeutics and Structure are among those also testing oral weight-loss drugs.

Expanding market

Analysts expect pills to expand access to weight-loss treatments and address injection hesitancy.

“Our focus is rather simple. Effective treatments and broad affordable access whether patients prefer a pill or an injection,” Novo CEO Doustdar said in a video posted on LinkedIn.

Paul Major, portfolio manager at Bellevue Asset Management, said 10 per cent or more of adults are hesitant to self-inject, but questioned the transformative potential of the pills, as they are less efficacious than injections.

Sydbank analyst Soren Lontoft Hansen estimates global peak annual sales of around 24 billion kroner (S$4.9 billion) for the Wegovy pill, with a strong launch key to Novo offsetting some headwinds in 2026, including price declines for its popular GLP-1 drugs, Ozempic and the Wegovy injection.

Under a November deal with the Trump administration, Novo and Lilly agreed to sell starter doses of their weight-loss pills, if approved, for US$149 a month to US Medicare and Medicaid patients, and cash-paying customers who cannot get insurance coverage for the medications. REUTERS