Novo Nordisk intends to stick it to its main rival.
The heavyweight title bout for GLP-1 supremacy entered the legal ring Tuesday, as the Danish pharma giant sued its duopolistic competitor Eli Lilly, alleging the Indianapolis-based company misled consumers with false advertising claims that its injectable weight-loss drug is superior to Novo’s
‘Clearly Worried’
Novo was the pioneer in GLP-1 drugs for diabetes and weight loss, a distinction that made it Europe’s most valuable company for parts of 2023, 2024 and 2025. But Lilly seized Novo’s pole position in the market, set to grow to $100 billion by 2030, with shrewd and aggressive expansion. Lilly mass-produced its Zepbound in advance of its 2023 approval, allowing it to blow out of the gates at a time when shortages hampered the availability of Novo’s Wegovy. In early 2024, Lilly dove into the direct-to-consumer market, where it could undercut Novo’s prices. Novo didn’t catch up with its own direct-to-consumer push until more than a year later.
Sales from the first quarter of this year say it all: Lilly’s Zepbound generated $4 billion in sales, while Novo’s Wegovy made $2.7 billion. In its lawsuit, filed in US District Court in New Jersey, Novo claims Lilly’s rapid rise has been aided by a massive ad campaign that violated false advertising and unfair competition laws. Lilly said it stands by the ads, which use results from its 2024 Surmount-5 trial that compared patients on 10 mg or 15 mg doses of Zepbound to others on 1.7 mg or 2.4 mg of Wegovy. Novo plans to seek an injunction if Lilly doesn’t agree to voluntarily remove the ads. Whatever the outcome, Zacks Investment Management chief market strategist Brian Mulberry sees a wounded Novo fighting however it can:
- “I understand that [Novo] feels left behind, but this lawsuit is not around any issues with product or performance — just accusing [Lilly] of false advertising because their product works too good!?!” he wrote. “That does not seem like a decision that comes from a place of strength.”
- Mulberry noted the companies’ earnings per share growth is expected to diverge dramatically next year, with Lilly expected to see 33% growth and Novo forecast to decline 3%.
The market appears to share that assessment: Shares in Lilly rose 2.5% Tuesday, while Novo’s American depositary receipts fell 0.5%.
Take a Chill Pill: It’s not all gloom for Novo. The company scored a major victory last year when it was the first of the two companies to win FDA approval for a weight-loss pill. Demand for oral Wegovy has since held strong, with Lilly stuck playing catch-up. Last week, Novo duplicated this achievement with European regulators, giving it a head start on its home continent
