Novo Nordisk is awaiting FDA approval for its oral weight loss drug, oral Wegovy, a development poised to significantly impact the rapidly growing obesity treatment market and intensify competition with Eli Lilly.

Oral GLP-1 Race Intensifies as Novo Nordisk Awaits Key FDA Decision

U.S. pharmaceutical giants Novo Nordisk (NVO) and Eli Lilly (LLY) are at the forefront of a rapidly evolving weight loss drug market, estimated to reach $150 billion by 2030. The focus has sharpened on the development of oral glucagon-like peptide-1 (GLP-1) receptor agonists, promising greater patient convenience compared to existing injectable therapies. Novo Nordisk recently submitted its oral formulation of Wegovy (semaglutide) for Food and Drug Administration (FDA) approval, with a decision anticipated in Q4 2025, a move that could significantly reshape the competitive landscape.

The Event in Detail

Novo Nordisk's New Drug Application (NDA) for its 25 mg oral Wegovy is supported by robust data from the Phase 3 OASIS 4 trial. This trial demonstrated a 15.1% reduction in body weight over 64 weeks for participants taking oral semaglutide. This figure is presented as potentially superior to Eli Lilly's experimental oral GLP-1, orforglipron, which showed a mean weight loss of 12.4% over 72 weeks in its own Phase 3 studies. The convenience of an oral formulation over injectables is a key differentiator, as a 2024 survey indicated that 42% of patients discontinue injectable therapies due to discomfort.

While Novo Nordisk advances its oral option, Eli Lilly has gained substantial traction with its injectable GLP-1/GIP dual receptor agonist, Zepbound (tirzepatide). Zepbound has showcased a higher efficacy, achieving up to 21% weight loss in trials and demonstrating a 20.2% reduction in a head-to-head comparison against injectable Wegovy's 13.7%. Eli Lilly's recent second-quarter earnings report, which surpassed analyst expectations with overall sales of $15.6 billion (a 38% year-over-year increase), was largely driven by the strong performance of Zepbound and Mounjaro.

Analysis of Market Reaction

The anticipation surrounding Novo Nordisk's oral Wegovy has generated considerable investor interest. A positive FDA decision in Q4 2025 is widely expected to trigger a significant stock surge for NVO, potentially exceeding 20%, reflecting the drug's potential to capture a substantial share of the expanding market. Bernstein analysts have upgraded Novo Nordisk to “outperform,” projecting the company to maintain approximately 30% of the global obesity market, and estimate oral semaglutide could generate $6.4 billion in sales by 2030.

Conversely, Eli Lilly's shares experienced a notable selloff, erasing approximately $100 billion from its market valuation, following the release of orforglipron's Phase 3 trial results. The drug's more modest weight loss effects, coupled with a higher discontinuation rate (10.3% at the highest dose versus 2.6% for placebo), disappointed investors. Leerink Partners analyst David Risinger reduced his 2030 forecast for orforglipron from $22 billion to $14 billion and downgraded his rating for Lilly shares from “outperform” to “market perform,” stating:

"The lower-than-expected weight loss, coupled with a higher discontinuation rate due to adverse events, could limit the drug's market penetration."

Broader Context & Implications

The Pharmaceutical Sector's Weight Loss Drug Market is undergoing a profound transformation. The introduction of highly effective oral GLP-1s could revolutionize patient treatment by addressing adherence challenges associated with injectables. Novo Nordisk has invested heavily in scaling semaglutide production, anticipating a late 2025 launch for its oral pill without supply constraints, aiming for a "first-in-class" status. Eli Lilly, while having stockpiled $808.5 million in orforglipron inventory for a 2026 launch, faces questions regarding its oral candidate's competitiveness.

Pricing strategies are also pivotal. Novo Nordisk's Rybelsus (oral semaglutide for diabetes) provides a precedent, being priced at parity with injectable Ozempic, suggesting a similar strategy for its obesity pill. This approach leverages existing brand equity and aims to avoid cannibalizing injectable sales. Analysts like UBS’s Trung Huynh suggest that Lilly's pill may struggle to justify premium pricing given its lower efficacy, while Novo's pill could command similar pricing to Wegovy. The Institute for Clinical and Economic Review (ICER) has indicated that, despite high list prices, GLP-1 drugs for obesity can be cost-effective due to their broad health benefits, with Zepbound and injectable Wegovy demonstrating strong cost-effectiveness.

Looking Ahead

The upcoming FDA decision for Novo Nordisk's oral Wegovy in Q4 2025 represents a critical catalyst for both companies and the broader Pharmaceutical Sector. A positive outcome for Novo Nordisk could solidify its market leadership in obesity treatment, driving substantial revenue growth. However, the intensity of competition is expected to persist, with both companies continually advancing their pipelines and vying for market share. Factors to watch include further clinical data from ongoing trials, insurer coverage decisions, and strategies to address affordability in a market where patient access remains a key challenge. The evolving landscape suggests that companies balancing efficacy, patient convenience, and strategic pricing will be best positioned for long-term success in this rapidly expanding therapeutic area.