Does EU Approval of Wegovy Pill Change NVO’s Competitive Story?
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Novo Nordisk NVO received a meaningful commercial boost last week after the European Commission approved the oral version of Wegovy (semaglutide 25 mg) for adults with obesity and at least one weight-related comorbidity. The approval expands the company’s obesity franchise across Europe, making Wegovy the first GLP-1 tablet approved for weight management in the EU and marking its fifth regulatory authorization after the United States, the United Kingdom, the United Arab Emirates and Bahrain. While the decision strengthens Novo Nordisk’s long-term growth narrative, investors should view it as an incremental positive rather than a game-changing development.
The approval broadens Wegovy’s commercial opportunity by offering a convenient oral alternative to injectable therapies, potentially attracting patients hesitant to start injections. It also reinforces Novo Nordisk’s strategy of extending the semaglutide franchise beyond injectables and should support prescription growth across Europe over time
However, the competitive backdrop remains far more challenging.Eli LillyLLY has rapidly emerged as Novo Nordisk’s strongest rival, with Zepbound (tirzepatide) steadily gaining traction in injectables and Foundayo (orforglipron) expanding its presence in the oral obesity market. Investor confidence in Lilly’s execution remains exceptionally strong, as reflected in the stock’s record highs and a market capitalization exceeding $1 trillion
Novo Nordisk’s oral strategy is off to a solid start. The Wegovy pill has already surpassed three million U.S. prescriptions in just over five months of launch, suggesting robust physician adoption. Yet maintaining that momentum may prove increasingly difficult. Lilly’s Foundayo offers a simpler once-daily dosing regimen without food or drink restrictions, a convenience advantage that could support long-term adherence. At the same time, Wegovy may benefit from a relatively lower burden of gastrointestinal side effects, meaning prescribing decisions are likely to depend on the overall clinical profile rather than convenience alone.
The recent launch of the Medicare GLP-1 Bridge program further highlights the shifting competitive dynamics. By expanding affordability for eligible beneficiaries, the program should increase the overall size of the obesity market. However, because both Wegovy and Lilly’s obesity portfolio receive the same reimbursement support, the initiative does little to alter the competitive balance. Instead, market share gains will increasingly depend on product differentiation, physician preference and long-term clinical outcomes.
Overall, the EU approval is undoubtedly a positive development for Novo Nordisk and reinforces the long-term commercial potential of the Wegovy franchise. Nevertheless, the company is still far from being out of the woods. U.S. pricing pressure, softer injectable prescription trends and intensifying competition from Lilly continue to weigh on the investment story. While the latest approval adds another growth catalyst, investors should watch execution and market-share trends closely, as they are likely to remain the key drivers of Novo Nordisk’s performance going forward.
NVO Faces Rising Competitive Pressure Beyond LLY in GLP-1s
While Novo Nordisk and Eli Lilly remain the two dominant players in the fast-growing obesity market, smaller biotech firms, like Viking Therapeutics VKTX andStructure Therapeutics GPCR, are also advancing GLP-1–based therapies to challenge the incumbents. Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed as both oral and subcutaneous formulations for the treatment of obesity. Viking Therapeutics plans to advance oral VK2735 into phase III development for obesity in the fourth quarter of 2026.
Structure Therapeutics’ phase II ACCESS study on its orally administered GLP-1 RA, aleniglipron, demonstrated significant weight loss across all doses. Structure Therapeutics expects to initiate the late-stage program of aleniglipron in obesity in the second half of 2026
NVO’s Stock Price, Valuation & Estimates
Year to date, Novo Nordisk shares have lost 1.1% against the industry’s 11.1% growth. The company has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below
NVO Stock Underperforms the Industry, Sector & the S&P 500
Novo Nordisk is trading at a discount to the industry, as seen in the chart below. Going by the price/earnings ratio, the company’s shares currently trade at 15.14 forward earnings, which is lower than 18.88 for the industry. The stock is trading much below its five-year mean of 29.25
Earnings estimates for 2026 have decreased from $3.47 to $3.38 per share over the past 60 days. During the same time frame, Novo Nordisk’s 2027 earnings estimates have deteriorated from $3.45 to $3.28 per share
NVO’s Estimate Movement
Novo Nordisk currently carries a Zacks Rank #5 (Strong Sell)
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
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Novo Nordisk A/S (NVO): Free Stock Analysis Report
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