Novo Nordisk Vs. Eli Lilly: Beyond The Weight-Loss Drug Battle

Author: Surbhi Jain | August 21, 2024 08:51am

The rivalry between Novo Nordisk A/S (NYSE:NVO) and Eli Lilly and Co (NYSE:LLY) has heated up as both companies vie for dominance in the booming obesity-drug market. But for investors, the real story may lie beyond just weight-loss treatments.

Novo Nordisk & Eli Lilly – Expanding Beyond Obesity

While Novo Nordisk’s Wegovy and Ozempic and Eli Lilly’s Zepbound, have garnered significant attention, both companies are laying the groundwork for broader growth.

Novo Nordisk’s CEO, Lars Fruergaard Jørgensen, has hinted at the company’s ambitions beyond its current portfolio, emphasizing a growing focus on cardioembolic diseases, reported CNBC. The move seemingly aims to leverage its expertise in diabetes and obesity to capture new markets.

Eli Lilly, meanwhile, is not just riding the wave of organic demand for its weight-loss drugs but is also making strategic moves in oncology and diabetes management. CEO David Ricks highlighted the “unbelievable demand” for their offerings, driven largely by organic consumer interest rather than aggressive marketing. But this demand surge is just the beginning, suggesting a diversified approach that could shield it from market fluctuations.

Supply Chain Challenges & Opportunities

A key differentiator between these two giants is their handling of supply chain challenges. Eli Lilly has successfully overcome earlier hurdles, making all doses of Zepbound available in the U.S.

In contrast, Novo Nordisk continues to struggle with supplying Wegovy to the U.S. market. This could give Eli Lilly a significant advantage in the near term, but the long-term impact will depend on how each company manages these challenges.

Technical Analysis: A Comparative Look

From a technical perspective, both stocks show strong bullish trends, but with some nuances.

• Novo Nordisk Stock: With a share price of $135.81, Novo Nordisk is trading above its five, 20 and 200-day exponential moving averages, signaling strong buying pressure. The stock’s eight-day SMA at $134.36 and 20-day SMA at $130.72 further reinforce a bullish outlook. However, Novo Nordisk stock is slightly below its 50-day SMA of $136.71, indicating a potential short-term sell signal. Overall, the trend remains positive, with the stock holding above key support levels.

Read Also: Weight-Loss Giant Novo Nordisk Tumbles To 200-Day Average Support: ‘Weakness Could Be Buying Opportunity,’ Analyst Says

• Eli Lilly Stock: Eli Lilly’s stock is also exhibiting strong bullish momentum, trading at $949.97, well above its eight-day SMA of $917.66 and 20-day SMA of $852.60. The stock’s 50-day SMA at $880.47 and 200-day SMA at $744.72 also support a continued upward trend. Unlike Novo Nordisk, Eli Lilly’s stock is above all key moving averages, making it technically stronger in the short and long term.

Looking Beyond the Obvious

While both Novo Nordisk and Eli Lilly are poised to dominate the obesity-drug market, their strategic expansions into other healthcare sectors could be the real drivers of long-term growth.

Investors should watch how these companies manage supply chain challenges and diversify their portfolios, as these factors will likely determine their future success.

Read Next:

• Telehealth Firm Hims & Hers Health Rides High On Demand for Copycat Weight Loss Drugs Amid Supply Shortages

Image created using artificial intelligence via Midjourney.

Posted In: LLY NVO