The pharmaceutical industry is highly competitive and driven by innovation. Those two facts could not be clearer than in the competition between Nordisk (NYSE: NVO) and Eli Lilly (NYSE: LLY) in the newly created GLP-1 weight loss space. While Eli Lilly looks like the winner right now, Novo Nordisk’s Wegovy pill is working better than expected. That’s important and could make the stock a long-term buy for dividend lovers.
Novo Nordisk made mistakes and lost the lead
Novo Nordisk was the first to market a weight loss drug GLP-1. The only problem is that it couldn’t meet the demand for its Wegovy vaccine. That allowed compounders to enter the U.S. market for the drug, limiting the company’s growth opportunities. It also gave competitor Eli Lilly a big opportunity when it launched its own GLP-1, Mounjaro, and Zepbound options.
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Eli Lilly’s drugs were also more effective, so the company’s financial performance was strong, while Novo Nordisk basically had to play catch-up. Investors reacted by dumping Novo Nordisk and buying Eli Lilly. The difference couldn’t be starker, with Novo Nordisk down 40% in the last three years and Eli Lilly up more than 150%.
However, there was a major change in early 2026. That’s when Novo Nordisk launched a pill version of Wegovy. Many consumers prefer pills to injections, so this development really opens up GLP-1 medications to more customers. This has been proven: the pharmaceutical company has seen even faster growth with the pill than with the injection. And the pill doesn’t seem to cannibalize the shot, so the market for GLP-1 is expanding. This is an even better performance than the company expected, as the pill generated 1.3 million prescriptions in the first quarter alone. A month later, when the company reported its first-quarter earnings results, the number of prescriptions had catapulted to two million.
Novo Nordisk faces a difficult year
That said, Novo Nordisk warned investors that 2026 would be a difficult year. Wegovy is losing its patent protection in India, which is putting pressure on the company’s sales in that large market. And Novo Nordisk agreed to reduce prices in the US market, which also weighs on revenue. Management expects volume to offset price in the long term as the Wegovy pill attracts more customers to the GLP-1 space. Given the pill’s initial success, that story seems increasingly likely.