Dec 23 (Reuters) - Novo Nordisk shares rose 7.5% in early trading on Tuesday after the U.S. Food and Drug Administration approved its weight-loss pill, giving the Danish drugmaker a competitive edge in the fast-evolving obesity treatment market.
The approval positions Novo Nordisk ahead in the race for a potent oral weight-loss medication as it works to recover market share lost to Eli Lilly.
The company, which faced massive supply challenges with the 2021 launch of its injectable drug Wegovy, has
said it is better prepared this time. CEO Mike Doustdar said in November that the company has "more than enough pills this time" and would go "all in" on the launch.
Novo Nordisk's share price has been declining as it has lost market share to compound manufacturers and Lilly, BMO Capital analyst Evan Seigerman said in a note.
The company will now benefit from first-mover advantage and capture patients with a preference for the convenience and comfort provided by an oral drug, Seigerman said, though that advantage could be short-lived with Lilly's oral drug orforglipron expected to be approved in 2026.
Novo Nordisk had a first-to-market advantage with injectable weight-loss drugs but initially struggled to meet the explosive demand. Eli Lilly took advantage to forge ahead with rival Zepbound, which now leads the way in weekly U.S. prescriptions.
Paul Major, portfolio manager at Bellevue Asset Management, said the oral weight-loss drugs could expand the market rather than cannibalise injectables, adding that "10% or more adults are hesitant to self-inject". However, he questioned their transformative potential, as pills are less efficacious than injections.
Sydbank analyst Soren Lontoft Hansen forecast strong demand for the Wegovy pill, estimating global peak annual sales of around 24 billion Danish crowns ($3.79 billion). He underscored the importance of the launch in offsetting headwinds anticipated in 2026, including potential declines in GLP-1 pricing.
Novo Nordisk's shares, which have dropped more than 50% this year, were the biggest gainers in Europe. Lilly's Frankfurt-listed shares fell 0.4%.
($1 = 6.3391 Danish crowns)
(Reporting by Danilo Masoni, Stine Jacobsen, Bhanvi Satija and Maggie FickEditing by David Goodman, Kirsten Donovan)
