Eli Lilly vs. Novo Nordisk: Latest Study Suggests This Company Has the Best Weight Loss Drug

Eli Lilly (LLY -3.36%) AND New Nordisk (NVO -3.75%) are two big names dominating today’s anti-obesity drug market. They generate billions of dollars in revenue from their therapies, and these companies still have big growth prospects.

But which weight-loss drug proves more effective could ultimately determine which company gets the lion’s share of the market. That’s an important question for investors because it could also determine which of these healthcare stocks is a better buy over the long term. A recent study suggests a winner may already be emerging in this race.

Eli Lilly’s weight loss drug may be more effective

The latest study conducted by JAMA Internal medicine The journal compared the effectiveness of tirzepatide (an Eli Lilly drug that is the active ingredient in Zepbound and Mounjaro) with semaglutide (a Novo Nordisk drug that is the active ingredient in Wegovy and Ozempic). It found that patients who took tirzepatide were more likely to experience significant weight loss than those who took semaglutide.

The study shouldn’t come as a huge surprise, though. In clinical trials, tirzepatid has shown some truly amazing numbers. Last year, Eli Lilly reported that in an 84-week study, patients were able to lose an average of up to 26.6% of their body weight while taking the drug. With semaglutide, patients experienced an average weight loss of approximately 14.9% over 68 weeks.

The studies were not identical, and without an apples-to-apples comparison, it is difficult to determine which of the two drugs has a better outcome under identical circumstances. However, given the clinical results and the latest study, it seems likely that tirzepatide is the more effective treatment.

The bigger battle is yet to be decided

While the latest study is encouraging for Eli Lilly investors, it may not be the final battleground between the two companies. Both are injectable treatments, and the better chance may lie with oral diet pills. The company that wins with the better diet pill may ultimately be best positioned to grab the largest market share in the future.

In a report published last year, Novo Nordisk found that an oral version of semaglutide helped people lose 15.1% of their body weight over 68 weeks. That’s comparable to the performance of the injectable version. One promising oral weight-loss drug, orforgliprone, being developed by Eli Lilly, allows patients to lose as much as 14.7% of their body weight in just 36 weeks.

While it is tempting to draw conclusions from these results, it appears the race will be much closer – at least for now.

Does this news mean Eli Lilly stock is a better idea?

Eli Lilly seems to have more effective weight loss drugs in its portfolio. But with the massive anti-obesity drug market expected to exceed $100 billion, that may not mean Novo Nordisk is in trouble. For many patients, this may depend on which medication they tolerate better and which has fewer side effects. Because patients will likely need to take these treatments for a long time, it’s not just the weight loss itself that will matter to patients—they need to be able to tolerate the medication well.

Both Eli Lilly and Novo Nordisk are seeing great results with their GLP-1 products, and there is still a lot more growth to come for these companies in the future. This latest news, while promising, doesn’t necessarily make Eli Lilly a better stock to buy right now.

Both of these stocks are good long-term investments. Novo Nordisk shares are trading at 44 times earnings for the past few months, compared to more than 110 times earnings for Eli Lilly, making Novo Nordisk shares a more attractive investment right now. But it’s hard to go wrong with either stock, given the potential for the lucrative GLP-1 market.