Eli Lilly reported 48% revenue growth to $23 billion in its latest quarter, crushing analyst expectations and raising its full-year guidance, while Novo Nordisk faces pipeline setbacks and cost-cutting measures amid market share losses. The divergence underscores a widening gap between the two GLP-1 drugmakers in the obesity and diabetes treatment space.
Lilly’s earnings beat expectations; Novo Nordisk struggles with pipeline and costs
Eli Lilly’s second-quarter results exceeded Wall Street forecasts, with revenue of $22.97 billion—a 47.67% increase from the prior year—and earnings per share (EPS) of $8.38, surpassing the consensus estimate of $6.58. Management raised its full-year revenue guidance to $85 to $87 billion, reinforcing confidence in sustained demand for its blockbuster drugs Mounjaro (diabetes) and Zepbound (obesity). Shares rose 9.23% year-to-date, though they remain down 3.32% over the past week due to factors such as $2.78 billion in acquisition-related charges and a 13% decline in realized prices (excluding rebates).
In contrast, Novo Nordisk—once Europe’s most valuable company—has seen its stock drop 70% since 2024 after pioneering GLP-1 treatments like Ozempic and Wegovy. The company reported second-quarter earnings that beat estimates and raised its full-year outlook, but its path to long-term growth remains unclear. Analysts noted that Novo’s pipeline and sustainable growth strategy face greater scrutiny than Lilly’s, with BMO Capital Markets’ Evan Seigerman stating, “While Novo raised guidance (as expected), the pipeline and path to sustainable growth remain less clear.”
Market share shifts and future drug launches intensify competition
Lilly’s dominance in the obesity and diabetes market is growing. In the U.S., Lilly held a 60.9% market share in the second quarter, compared to Novo’s 38.8%, according to Lilly’s earnings presentation. The company’s Zepbound and Mounjaro have driven resilient demand, even as U.S. prices fell 9% excluding rebates. Bernstein analyst Courtney Breen reinforced this view, stating, “Lilly remains best positioned to capture the majority of global incretin market growth.”
Novo Nordisk, meanwhile, is racing to recover lost ground. Its Wegovy was Europe’s most valuable drug in 2023, but the company has struggled to replicate its success. In September 2025, Novo announced it would cut 9,000 jobs—reducing its workforce by 12,000—as part of a $1.2 billion cost-cutting initiative. Novo’s CFO, Karsten Munk, acknowledged the challenges, stating, “We managed our resources and cost base in a very disciplined manner because we were in a period of low growth.”
The competition is set to intensify further. Lilly plans to launch its weight-loss pill in Europe and the U.K. by early 2027, while Novo Nordisk’s pipeline faces setbacks. The company’s phase three trial for ziltivekimab, a cardiovascular drug, failed last week, causing its shares to drop 10%. Goldman Sachs had previously highlighted ziltivekimab as a potential growth driver, but the trial’s failure dashed those hopes.
Analysts debate Lilly’s growth trajectory amid mixed signals
Wall Street remains bullish on Lilly, with Morgan Stanley raising its price target to $1,419 post-earnings. However, some analysts caution that consensus targets may lag the company’s fundamentals. For Lilly to reach $1,750 by August 2027, a 50% gain would be required, contingent on retatrutide’s Q1 2027 BLA clearance and Zepbound sustaining its momentum. The company’s low beta of 0.506—indicating lower volatility—has also tempered investor enthusiasm despite strong revenue growth.
Insider activity has added another layer of scrutiny. Across 13 recent transactions, Lilly insiders have been net sellers, though the company attributes this to routine portfolio management rather than a lack of confidence in the business.
Novo Nordisk, meanwhile, is focusing on investing in existing growth assets like Wegovy while continuing significant R&D spending to secure future blockbusters. Munk emphasized the company’s commitment to innovation, stating, “We really need to ensure we invest in the growth assets we have and continue to invest significantly in R&D so we have future winners and growth drivers.”