Glucagon-like peptide-1 (GLP-1) agonists have taken the healthcare world by storm, emerging as mainstream treatments for patients with diabetes or obesity. Some of these medications include Novo Nordisk's (NYSE: NVO) Ozempic, Wegovy, Rybelsus, and Saxenda, and Eli Lilly's (NYSE: LLY) Mounjaro and Zepbound.
Below, I'll dig into which pharmaceutical stock I think is the better buy for the long run. While Novo Nordisk and Lilly each carry encouraging prospects, I see one of these companies as the superior opportunity.
The case for Novo Nordisk
Right now Novo Nordisk has a considerable lead on Lilly in GLP-1 market share, and a couple of notable wins have me thinking this lead will widen.
Earlier this year, J.P. Morgan released a report outlining the potential for GLP-1 treatments in other markets. Specifically, research suggests that GLP-1 drugs have applications outside of weight loss. Such areas include sleep apnea, arthritis, kidney disease, cardiovascular disease, and Alzheimer's.
Although becoming a multi-platform breakthrough could serve as a catalyst for both Novo Nordisk and Lilly, I think Novo Nordisk has the edge for now. Back in March, Wegovy received an expanded indication from the Food and Drug Administration (FDA) to treat obesity care patients who are also at risk of major cardiovascular events.
A few months later, Wegovy was approved to enter yet another market: China, a geographic region where obesity rates are quite high.
All things considered, I think Novo Nordisk's momentum in the GLP-1 realm could be kicking into a new gear.
Image source: Getty Images.
The case for Eli Lilly
To be fair, while Novo Nordisk has the lead in the GLP-1 arena, I have to note that Lilly's Mounjaro and Zepbound have not been on the market nearly as long as its competitor's medications have. And although Mounjaro and Zepbound have already reached blockbuster status, Lilly's own CEO admits that the company hasn't been investing as heavily in marketing campaigns for these medications as it could be.
I see this as a strategic move on Lilly's end; it seems the company is content taking its time building a presence in the market, and is not in a rush to oversell its products. Such patience could be a wise move in the long run as Mounjaro and Zepbound become more popular.
Where Eli Lilly starts to really separate itself from Novo Nordisk is in other markets. For example, over the summer Lilly's Alzheimer's drug received approval from the FDA. More recently, the company also received the nod to enter the eczema market via its newly approved drug Ebglyss.
Lastly, Lilly is making some interesting moves relating to the use of artificial intelligence (AI) in the healthcare world. The company is working with OpenAI to help develop new medications to combat antimicrobial resistance (AMR).
The bottom line
At a high level, both Novo Nordisk and Eli Lilly appear to have strong road maps ahead. But thinking long-term, I see Lilly as the clear-cut winner. Novo Nordisk's position as ruler of the GLP-1 realm should eventually normalize as Lilly gains more market share and other potential players enter the space as well.
Beyond weight loss treatments, Lilly has some billion-dollar opportunities both with its Alzheimer's and eczema medications, and in the use of AI in drug development -- but none of these efforts have started bearing fruit for the company yet.
For me, Lilly's diverse platform compared to Novo Nordisk's is attractive, and I'm confident that Eli Lilly has more upside potential than its competition does.
Should you invest $1,000 in Eli Lilly right now?
Before you buy stock in Eli Lilly, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Eli Lilly wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $846,108!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. TheStock Advisorservice has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of October 14, 2024
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Adam Spatacco has positions in Eli Lilly and Novo Nordisk. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.
