Novo Nordisk Gains Edge with FDA Approval of Weight-Loss Pill

Novo Nordisk's shares surged nearly 10% after the FDA approved its weight-loss pill, granting it an advantage over Eli Lilly. The company's shares had previously declined due to lost market share. The approval positions Novo Nordisk to capture patients seeking the convenience of oral medications.

Novo Nordisk's shares, listed in Frankfurt, saw a nearly 10% increase in early trading on Tuesday following the approval of its weight-loss pill by the U.S. Food and Drug Administration.

This approval positions the Danish pharmaceutical giant ahead in the competitive market for oral weight-loss medications, as it aims to recover market share lost to rivals such as Eli Lilly. According to BMO Capital analyst Evan Seigerman, Novo Nordisk's declining share price has been attributed to losing ground to other compound manufacturers and Eli Lilly.

Seigerman noted that Novo Nordisk will benefit from being the first to market with this medication, appealing to patients who prefer the ease of an oral drug. However, this advantage may be fleeting, as Eli Lilly's oral alternative, orforglipron, is expected to receive approval by 2026. Previously, Novo Nordisk faced challenges in meeting demand for its injectable weight-loss treatments, allowing Eli Lilly to take the lead with its Zepbound drug, which now dominates weekly U.S. prescriptions.

Over the past year, Novo Nordisk's shares have dropped by more than 50% in value.

(With inputs from agencies.)