Novo Nordisk and Eli Lilly Lead Potential $60 Billion Obesity Drug Market; Valuations Look Rich

The approval of Novo Nordisk's GLP-1 agonist Wegovy in 2021 has led to a demand surge for the active ingredient semaglutide in various forms, including diabetes drug Ozempic. Eli Lilly's approved diabetes drug Mounjaro is poised to generate even stronger weight loss and to launch in obesity around the end of 2023. We think Novo and Lilly will continue to lead the obesity market over the next 10 years, with incremental innovation in this rapidly expanding market that will support their wide moats. We assume Novo Nordisk's Wegovy, higher-dose oral and injectable semaglutide, and novel GLP-1/amylin cagrisema will support more than 35% share in 2032. Eli Lilly is likely to remain Novo's chief competitor, driven by potential launches of Mounjaro in obesity as well as an oral GLP-1 and a novel triple agonist in 2025, resulting in a 40% share by 2032. We think Amgen, Pfizer, and other biopharma firms could begin to launch their own GLP-1-based obesity drugs as early as 2025, with these new players growing to roughly one quarter of the market by 2032.