The $100 billion battle

The escalating feud between Eli Lilly and Novo Nordisk is getting as bitter as the World Cup rivalry between Argentina and Brazil.

Today, Novo Nordisk filed a lawsuit against Eli Lilly over its GLP-1 ads, which Novo says unfairly claim Lilly’s drugs outperform Novo’s. In its complaint, Novo called Lilly’s ads “maliciously and deceptively false.” Novo says that Lilly is comparing the highest approved doses of its medication with lower doses of Ozempic and Wegovy, while omitting Novo’s newer, more effective versions in its ads. Novo is asking Lilly to not only withdraw the ads, but run a “corrective” ad campaign, in addition to seeking compensation for financial damages.

Eli Lilly clapped back today, saying that it stands by the ads. “Rather than compete on the merits of its products, Novo is asking a court to stop Lilly from communicating the results of that trial,” Eli Lilly said in a statement.

Shares of Novo lost 0.51%% today, while Eli Lilly rose 2.58%.

Losing weight, gaining market share

The lawsuit is just the latest punch thrown in an ongoing fight between the two behemoths that dominate the lucrative weight loss medication industry. The fierce competition is understandable: The GLP-1 market is expected to reach $100 billion by 2030.

Novo Nordisk got a huge head start when Ozempic was first approved in 2017, followed by Wegovy’s approval in 2021. These drugs exploded in popularity—helping Novo’s market cap balloon to over the GDP of Denmark. But in 2022, Eli Lilly came out of the gate with Mounjaro, an even stronger GLP-1 drug that quickly gained momentum, making Eli Lilly a new Wall Street darling as a series of supply chain bungles hurt Novo’s ability to produce enough of its drugs to meet demand.

Since then, the two have gone head to head in a number of clinical trials, fighting tooth and nail to prove their drugs trigger the biggest bout of weight loss—and big wins for investors. The next frontier is GLP-1 pills, and so far, it looks like Novo may have an early lead once again: In clinical trials, people on the pill version of Wegovy lost an average of 16.6% of their body weight after 64 weeks, compared to Eli Lilly’s GLP-1 pill, Foundayo, which helped patients lose 12.4% of their body weight after 72 weeks.

But investors appear to be rooting for Lilly: Shares of the drugmaker are up 9.35% this year, while Novo Nordisk is down 3.61% over the same time period.

Let the weigh-in for the next round begin.—LB