Novo Nordisk A/S and Eli Lilly & Co. are leading the way in the weight-loss drug market, which is growing fast and getting more competitive. Novo Nordisk has Wegovy, and Eli Lilly has Zepbound, which are key players in this competition.
Both companies are working hard to keep up with the high demand for these drugs, but there’s still not enough to go around. This week, both companies shared their quarterly results, showing how important these medications are for their financial success.
Even though Novo Nordisk’s stock has gone up by more than 350% in the last four years, it’s still selling at a 30% lower price compared to Eli Lilly’s stock. This suggests that there’s room for Novo Nordisk to grow and catch up with Eli Lilly.
Novo Nordisk is working hard to meet the growing demand for Wegovy in the United States, despite facing challenges with supply and competition from Eli Lilly. To address this, the company is investing heavily in increasing manufacturing capacity, spending around $6.4 billion, and planning to acquire three additional factories for $11 billion.
This investment is crucial as the number of patients starting on Wegovy each week has surged to over 25,000, up from 5,000 in December. However, in the first quarter, Wegovy’s sales fell short of analysts’ expectations due to pricing pressure and supply issues.
The pricing of Wegovy and its related medicine for diabetes, Ozempic, has sparked discussions in the US.
A study from Yale University suggests that Ozempic could be produced profitably for less than $5 per month, yet it is priced at $936, while Wegovy costs $1,349. Novo Nordisk’s CFO, Karsten Munk Knudsen, mentioned that prices have decreased due to increased volume, broader insurance coverage, and competition.
Despite this, around 80% of Wegovy patients with commercial insurance in the US pay $25 or less per month. However, Novo Nordisk still limits access to lower doses of Wegovy to ensure patients can continue treatment as they progress to higher doses.
