Novo Nordisk's (NVO 1.27%) Wegovy currently reigns as the king of the obesity drug market. It generated roughly $4.5 billion in sales last year and will likely rake in even more in 2024.
But note the use of the word "currently." Wegovy's market-topping position is precarious. Here are three drugs most likely to dethrone Novo Nordisk's blockbuster drug.
1. Eli Lilly's Zepbound/Mounjaro
Eli Lilly (LLY +0.70%) won U.S. regulatory approval for Zepbound in helping patients lose weight in November 2023. In the first quarter of 2024, the sales for Lilly's obesity drug topped $517 million.
NYSE: LLY
Key Data Points
There's more to the story. Zepbound and Mounjaro are different brand names for the same drug, tirzepatide. Lilly markets Mounjaro in the U.S. as a treatment for type 2 diabetes. In Europe, though, the pharma giant markets Mounjaro for type 2 diabetes and weight loss.
Zepbound/Mounjaro works in a different way than Wegovy in helping people lose weight. Clinical studies of the two drugs suggest that Zepbound/Mounjaro could achieve greater weight loss. This efficacy advantage could enable Lilly's weight-loss drug to steal the No. 1 market position from Wegovy in the not-too-distant future.
2. Novo Nordisk's CagriSema
Even with Zepbound/Mounjaro breathing down Wegovy's neck, there's good news for Novo Nordisk. The Denmark-based drugmaker has a successor in the works that could help it battle Eli Lilly.
NYSE: NVO
Key Data Points
Novo Nordisk is evaluating CagriSema in late-stage clinical studies targeting obesity and type 2 diabetes. CagriSema combines cagrilintide (the "Cagri" in the name) with semaglutide (the "Sema" in the name, which is marketed under the brand names Ozempic and Wegovy). The first phase 3 studies for the experimental drug wrap up next year, with others scheduled to complete in 2026.
Earlier clinical studies of CagriSema found that it helped patients achieve significantly greater weight loss than semaglutide (Wegovy) did. Even if Lilly's Zepbound/Mounjaro topples Wegovy, it's possible that CagriSema could enter the market at the right time for Novo Nordisk to retain its overall leadership in the obesity drug market.
3. Eli Lilly's orforglipron
However, at least one other treatment could give Eli Lilly the advantage over Novo Nordisk. Lilly has another promising obesity drug in late-stage testing: orforglipron.
Wegovy and Zepbound are weekly injections, but orforglipron is a once-daily pill. This convenience factor could help Lilly shake up the obesity drug market even more. It should be noted, though, that Novo Nordisk is evaluating an oral version of Wegovy in a late-stage clinical trial.
Lilly expects its phase 3 studies of orforglipron to finish next year. That could set the stage for a commercial launch of the drug in 2026 if all goes well.
Others on the horizon
I think Zepbound/Mounjaro, CagriSema, and orforglipron present the greatest threats to Wegovy. However, other promising weight loss drugs are also on the horizon.
Lilly is evaluating retatrutide in phase 3 studies. Like Zepbound, retatrutide is administered via injection. However, it could achieve greater weight loss than Zepbound.
Both Lilly and Novo Nordisk have other experimental obesity drugs in phase 2 testing. So do smaller drugmakers, including Altimmune, Structure Therapeutics, and Viking Therapeutics (VKTX +4.70%).
NASDAQ: VKTX
Key Data Points
Investors' best bets
All of the stocks mentioned could be winners. Two of them, though, stand out to me as the best bets.
For more conservative investors, I think Eli Lilly is a great pick. The stock's valuation might seem absurdly high with its forward earnings multiple of over 63. However, Lilly has tremendous growth prospects, not all of which stem from its obesity drugs.
If you're a more aggressive investor, you could like Viking Therapeutics. The company is still relatively small, with a market cap of around $6 billion. Its experimental obesity drug VK2735 looked great in phase 2 testing. Viking also has a promising phase 2 candidate targeting nonalcoholic steatohepatitis (NASH). Success in late-stage studies for these programs could enable Viking stock to soar in the coming years.
