Patent moat + new drug launches: Eli Lilly's full-year guidance consolidates its leading position in weight loss medications

Eli Lilly, the American pharmaceutical company, has issued an optimistic full-year sales forecast, further consolidating its leading position in the obesity treatment market driven by strong demand for its weight-loss drugs.

This outlook stands in stark contrast to its competitor Novo Nordisk. On Tuesday, Novo Nordisk warned investors that due to increased price competition in the weight-loss drug market, its sales could decline by as much as 13% this year. In comparison, Eli Lilly expects sales to grow by up to 27%.

During the trading session, Eli Lilly’s stock price surged significantly, rising over 9%, while Novo Nordisk fell more than 5%. The previous trading day, the stock closed down 12.56%.

Currently, the demand for weight-loss drugs remains high, and Eli Lilly and Novo Nordisk are facing competition from telemedicine companies launching cheaper generic versions. Additionally, lowering drug prices has become a priority for Trump, and both companies have reached agreements to offer lower prices.

Compared to Novo Nordisk, Eli Lilly is in a relatively more advantageous position, with its blockbuster drugs—Mounjaro for diabetes and Zepbound for obesity—still under approximately ten years of patent protection.

Meanwhile, some of Novo Nordisk’s drugs are expected to face generic challenges in certain countries as early as this year.

Mizuho Securities analyst Jared Holz stated, “This further proves that Eli Lilly is leading this track. Novo Nordisk is in a chasing position, and everyone knows it.”

Eli Lilly expects full-year 2026 sales to be between $80 billion and $83 billion, higher than the Wall Street average estimate of $77.7 billion. The company also projects adjusted earnings per share of $33.50 to $35 in 2026, surpassing analyst expectations of $33.08.

Eli Lilly also anticipates that the obesity drug market will expand further this year, as the Trump administration agreed to include these drugs under Medicare coverage, benefiting more elderly patients.

The company is also awaiting approval for its oral weight-loss medication, which could be launched as early as April. Novo Nordisk has already launched its oral weight-loss drug this year with a strong start. Eli Lilly is preparing to follow quickly, having produced billions of doses of oral medication before product approval.

Additionally, Eli Lilly has introduced a multi-dose version of the weight-loss injection Zepbound, a move that helped the company reach a partnership agreement with the Trump administration. On the 20th of last month, the FDA approved a new device that provides a one-month dose.

Eli Lilly’s CFO, Lucas Montarce, stated that the company plans to launch a multi-dose injection pen within the next 30 days. This product will be available to Medicare patients and also offered for cash purchases through Eli Lilly’s direct sales platform.

BMO Markets analyst Evan Seigerman pointed out that even though the entire industry faces pricing pressures, Eli Lilly still holds a relative advantage with its existing and in-development drug portfolio. “Although Eli Lilly and Novo Nordisk compete in the same market, the pressures they face are not exactly the same.”

Eli Lilly is also testing new generations of weight-loss drugs across multiple indications. For example, its injectable weight-loss drug retatrutide is undergoing clinical trials for obesity, cardiovascular disease, chronic kidney disease, and related conditions.

In December last year, the company announced that this drug could help patients lose nearly a quarter of their body weight, potentially making it the most potent weight-loss drug to date.

The company has also initiated new research on brenipatide, an experimental drug mimicking the hormone mechanism of Zepbound, with indications including tobacco dependence, bipolar disorder, and asthma, having previously been used in alcohol dependence studies.

Unlike Novo Nordisk, which is highly focused on diabetes and obesity, Eli Lilly’s product portfolio also covers neuroscience, immunology, and cancer.

In 2024, the company received approval for a new Alzheimer’s drug called Kisunla and is researching another experimental drug, remternetug, with results expected later this year.

Eli Lilly stated that global drug prices are expected to decrease by “low to mid-single digits” to double digits this year, partly due to agreements with the US government on price reductions and the launch of new cash payment pricing strategies.

(Source: Caixin)