Novo Nordisk (NVO.US) oral diet pills are approved by the FDA and Eli Lilly's “war on diet pills” has entered a new round

The Zhitong Finance App noticed that before the market on Tuesday, Novo Nordisk (NVO.US) shares rose 7.5% after the US Food and Drug Administration (FDA) approved its weight loss pills. This gave the company a competitive edge in the rapidly evolving obesity treatment market.

This approval puts Novo Nordisk in a leading position in the competition to develop potent oral diet pills. Currently, the company is working to reclaim the market share seized by LLY.US (LLY.US).

Novo Nordisk faced huge supply chain challenges when it launched its injectable drug Wegovy in 2021, but the company said it was more prepared this time around. CEO Mike Dusta said in November that the company now has “more than enough pills” and will “go all out” to launch the product.

BMO Capital analyst Evan Segman pointed out in the report that Novo Nordisk's stock price had been declining until now due to loss of market share to compound pharmaceutical companies and Eli Lilly.

Segman said Novo Nordisk will now benefit from the first-mover advantage and attract patients who prefer the convenience and comfort of oral medications; however, with Eli Lilly's oral drug orforglipron expected to be approved in 2026, this advantage may be short-lived.

Novo Nordisk had an initial advantage in the injectable diet drug market, but it was initially difficult to meet explosive demand. Eli Lilly took the lead, and with competitive product Zepbound, Zepbound is currently leading the way in the number of weekly prescriptions in the US.

Paul Major, portfolio manager at Bellevue Asset Management, said oral diet pills may expand the market rather than cannibalize injectable market share, adding that “10% or more adults are hesitant to self-inject.” However, he also questioned the transformative potential of these pills, as they were less effective than injections.

Sydbank analyst Soren Langtorff Hanson predicts strong demand for Wegovy tablets, and estimates that global sales peak at around DKK 24 billion ($3.79 billion) per year. He emphasized the importance of this announcement to offset anticipated headwinds in 2026, including the risk of a possible decline in the pricing of GLP-1 drugs.

Novo Nordisk, whose stock price has dropped by more than 50% since this year, became the single stock with the biggest increase in the European stock market on Tuesday. Eli Lilly fell 1% before the market.