The anti-obesity drug market could one day be worth $100 billion. It's a massive opportunity in healthcare, and two companies that are leaders in that space today are Eli Lilly (NYSE: LLY) and Novo Nordisk (NYSE: NVO). Unsurprisingly, these are also two of the most valuable healthcare companies in the world right now.
They have been rivals for decades, and the growing popularity of their respective glucagon-like peptide 1 (GLP-1) drugs ensures that the competition between these two businesses won't fizzle out anytime soon. With their latest quarterly results in, let's take a closer look at how their GLP-1 products are doing and which ones may end up on top in the future.
Ozempic remains firmly ahead of the competition
The name "Ozempic" has become synonymous with weight loss, even though the drug is technically approved for diabetes. It has been experiencing significant growth and last quarter (which ended in June), it was far and away Novo Nordisk's top-selling drug. Here's how its sales compared against weight loss drug Wegovy, which shares the same active ingredient (semaglutide) and Eli Lilly's top GLP-1 drugs -- Mounjaro (approved for diabetes) and Zepbound (approved for weight loss}:
| Drug | FDA Approval | Most Recent Quarterly Sales | Growth Rate |
|---|---|---|---|
| Ozempic (semaglutide) | December 2017 | $4.2 billion | 30% |
| Mounjaro (tirzepatide) | May 2022 | $3.1 billion | 215% |
| Wegovy (semaglutide) | June 2021 | $1.7 billion | 53% |
| Zepbound (tirzepatide) | November 2023 | $1.2 billion | n/a |
Source: Company filings.
Currently, Ozempic remains atop the other GLP-1 drugs on this list, but the drug has been available for longer. As the other drugs on this list become more prominent in the healthcare industry, it may only be a matter of time before they quickly move up this list and Ozempic drifts down.
Why Eli Lilly could end up with the top two GLP-1 drugs
Novo Nordisk has the early lead in the GLP-1 market, but Eli Lilly could overtake it within the next year. Its drugs appear to be well tolerated among patients and are comparable in terms of side effects to Novo Nordisk's GLP-1 options. The difference between which drug patients take could come down to the potential weight loss benefits.
In clinical trials, tirzepatide, the active ingredient in both Zepbound and Mounjaro, showed it could help people lose nearly 27% of their body weight after a period of 84 weeks. With semaglutide, which is active in Wegovy and Ozempic, the average weight loss was lower and around 15% over a 68-week period.
Given the higher weight loss numbers and the impressive growth in Mounjaro, I would expect to see both of Eli Lilly's drugs eventually overtake Ozempic as the company rolls out its products to more markets and expands its production capacity.
Is Eli Lilly the better healthcare stock to buy than Novo Nordisk?
Eli Lilly may end up having the better weight loss drugs in the near future, but both companies are still working on more drugs, including weight loss pills, which could end up being their most successful products in the long run.
Ultimately, I don't think you can go wrong with investing in either company; with such massive opportunities in weight loss, both stocks can be good options. The decision may simply come down to your preference of whether you want to go with a more diversified healthcare company in Eli Lilly or you want more of a pure-play diabetes and weight loss stock in Novo Nordisk. The latter also comes with a lower valuation as well, giving investors a better margin of safety.
But rather than trying to pick a winner, you may want to consider adding both stocks to your portfolio as these are two of the best healthcare stocks you can own right now.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
