Big Pharma is expected to see big returns from its investment in a class of drugs made famous by Novo Nordisk’s (NVO) popular diabetes drug Ozempic.

Deloitte’s annual report, Measuring the Return from Pharmaceutical Innovation, found that GLP-1 drugs could fuel significant returns on research and development investments made last year by major drugmakers. The consulting firm analyzed the projected internal rate of return for late-stage pipeline assets across the 20 leading pharma companies.

On average, these companies forecast peak sales of $510 million per asset. But when GLP-1s are excluded, that figure drops sharply to $370 million. The internal rate of return for late-stage pipeline assets climbed from 5.9% in 2024, from 4.1% in 2023 — again driven in large part by GLP-1 drugs. Without them, returns would have declined, dipping to 3.8% in 2024 and 3.4% in 2023.

This matters even more given that the report also found that the average cost to develop a drug for Big Pharma was $2.23 billion in 2024, up from $2.12 billion the year before.

GLP-1 drugs mimic hormones that regulate blood sugar and suppress appetite, making them highly sought after for treating obesity and Type 2 diabetes. The surging demand has propelled Eli Lilly (LLY) and Novo Nordisk into becoming the largest pharma companies in the world. Eli Lilly’s weight-loss drug Zepbound generated $4.9 billion in annual revenue, while Novo Nordisk’s rival treatment, Wegovy, reached roughly $8 billion in sales.

Wall Street has taken notice. Since the U.S. Food and Drug Administration (FDA) approved Zepbound in November 2023, Eli Lilly’s stock has soared more than 40%, pushing its market capitalization past $750 billion. Novo Nordisk has seen an even steeper climb, with its stock rising over 76% since Wegovy’s launch in 2021.

With such massive returns, several companies — including Novo Nordisk, Eli Lilly, Pfizer, and Amgen— are advancing next-generation GLP-1 drugs and investigating their potential for new uses, such as treating sleep apnea and improving heart health.

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