By David Wainer

Novo Nordisk sparked the obesity drug revolution with Ozempic and Wegovy. Now it's racing to avoid falling further behind Eli Lilly.

On Monday, Novo announced new partnerships with telehealth providers Hims & Hers Health, Ro, and LifeMD to sell its weight-loss drug Wegovy through their platforms. Hims & Hers, for instance, will dispense all doses of Wegovy to Americans who sign up for eligible subscriptions, with plans starting at $599 a month.

The move accomplishes two important things for Novo Nordisk. First, it expands Wegovy's reach among U.S. patients, especially cash-paying customers willing to access the drug outside traditional insurance channels. Second, it could reduce competition from compounded versions of semaglutide, the active ingredient in Wegovy, which until recently were offered by Hims & Hers itself. The partnerships also send a clear message that after years of shortages, Wegovy is now available in all doses.

The news lifted Novo Nordisk's U.S.-traded shares by 4% at the close on Monday, while Hims & Hers and LifeMD surged even more. But the momentum for Novo Nordisk might be short-lived. Prescription data from health-analytics company Iqvia, tracked by Wall Street analysts, shows U.S. demand for Ozempic and Wegovy has been largely flat to start the year, even as Eli Lilly's Zepbound has surged.

Telehealth partnerships might help at the margins, but patients and doctors are increasingly shifting toward Zepbound because of its higher efficacy. Zepbound also has a steadier supply chain, and Lilly was faster to roll out retail and telehealth partnerships. In fact, Lilly partnered with Ro back in late 2024, months ahead of Novo Nordisk.

"Sometimes it is the story of the tortoise and the hare," BMO Capital Markets analyst Evan Seigerman wrote earlier this month as he downgraded Novo Nordisk shares to Market Perform. "While Novo had the head start with approval of semaglutide, we believe that this first mover advantage has waned, with Lilly's tirzepatide taking share rapidly," he wrote, referring to the active ingredients in Wegovy and Zepbound, respectively.

Recent U.S. prescription data shows Zepbound with more than 50% of total prescriptions in the GLP-1 obesity market and continuing to grow faster than Wegovy. In the past two weeks, as prescription volumes have remained sluggish, analysts cut first-quarter sales estimates for Wegovy by about 5%, according to FactSet.

Investor attention will now turn to Lilly's earnings on Thursday, followed by Novo Nordisk's report next week. In recent years, Novo Nordisk built a reputation for consistently raising its guidance, thanks to the blockbuster performance of Ozempic and Wegovy. Now, though, there is a growing risk it may have to lower its full-year revenue outlook, which currently calls for 16% to 24% growth.

The diverging trajectories are clearly reflected in the companies' stock prices. After years of rising in tandem, Lilly shares are up 15% this year, while Novo Nordisk's are down 24%.

Being second in what might become the largest drug category in history is hardly a failure. But the bigger concern is that Novo Nordisk isn't just trailing Lilly in injectables -- it also lacks a clear answer to Lilly's promising oral pipeline. On Thursday, Lilly is expected to provide an update on its experimental once-daily GLP-1 pill, orforglipron. Earlier this month, the company said the drug met its goals in a late-stage trial, helping diabetes patients lose weight. Several more studies are expected to be released in the coming months. If successful, orforglipron could launch as soon as 2026, with analysts projecting multibillion-dollar annual sales. Right now, Novo Nordisk doesn't seem to have an answer.

For Novo Nordisk, telehealth access is progress. But in this market, access alone won't win the war.

Write to David Wainer at david.wainer@wsj.com

(END) Dow Jones Newswires

April 30, 2025 05:30 ET (09:30 GMT)

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