Shares of Novo Nordisk (NYSE:NVO) fell in pre-market trading following a study published by JAMA Internal Medicine indicating that Eli Lilly’s (NYSE:LLY) weight loss drug Mounjaro demonstrates faster and more significant weight loss compared to Novo Nordisk’s Ozempic.
JAMA’s Study of Weight Loss Drugs
JAMA’s study, which compared outcomes in 9,193 patients using Mounjaro and an equal number using Ozempic, highlighted Mounjaro users’ higher likelihood of achieving substantial weight loss percentages—76% more likely for at least 5%, over twice as likely for at least 10%, and more than three times as likely for at least 15% weight loss. Notably, despite both drugs being intended for type 2 diabetes, half of the study participants used them solely for weight loss, potentially influencing the outcomes.
In response, Novo Nordisk underscored the importance of conducting head-to-head clinical trials and noted the absence of Wegovy, another weight loss drug they produce, in the study’s analysis. The company emphasized its commitment to maintaining competitive positioning in the weight loss medication market.
Implications for Investors
The findings of the JAMA study could impact Novo Nordisk’s market share and revenue projections within the competitive weight loss medication sector. Investors may react to these results by adjusting their expectations of Novo Nordisk’s future sales potential for Ozempic relative to Mounjaro. This shift in market sentiment could influence Novo Nordisk’s stock performance in the near term, as investors assess the implications of Mounjaro’s perceived efficacy advantage.
Furthermore, ongoing developments in clinical trials and regulatory responses will be critical for investors tracking Novo Nordisk. Positive outcomes from future studies or regulatory approvals could bolster investor confidence and potentially mitigate the initial market reaction to the JAMA study. Conversely, delays or unfavorable findings in upcoming trials could further impact Novo Nordisk’s stock valuation amidst projections of substantial growth in the global weight loss medication market, estimated to reach $150 billion by the early 2030s.
Is Novo Nordisk a Buy, Sell, or Hold?
Analysts remain cautiously optimistic about NVO stock, with a Moderate Buy consensus rating based on six Buys and one Hold and Sell each. Over the past year, NVO has skyrocketed by more than 80%, and the average NVO price target of $142.36 implies a downside potential of 0.5% from current levels.
