Eli Lilly and Novo Nordisk battle for dominance in the obesity drug market.
Eli Lilly’s Big Gamble on GLP-1 Pills — Stock Market Newsletter Edition
The Opening Story
Welcome to today’s Daily Finance Newsletter, where we dive into one of the most important stories shaping the stock market: Eli Lilly’s big bet on weight-loss pills.
Eli Lilly, already a giant in healthcare thanks to its blockbuster injectables Mounjaro and Zepbound, is now pushing hard into oral GLP-1 treatments. Its new pill, orforglipron, could open the door to millions of new patients who prefer pills over injections. But when late-stage trial results came in below expectations — 10–12% weight loss vs. Wall Street hopes of 13–15% — the stock plunged 14% in one day, wiping out nearly $100B in market value. This shock has investors asking: is Lilly still a buy, or is Novo Nordisk ready to take the lead?
Stock market impact: At a $700B valuation, Eli Lilly is one of the largest companies in the world. Its stock swings ripple across indexes.
Personal finance angle: For investors building a long-term portfolio, obesity and diabetes drugs are not just medical innovations — they’re sector-defining growth opportunities.
Sector play: Only Eli Lilly and Novo Nordisk dominate this $100B+ obesity/diabetes market. This is not a speculative bet — it’s a duopoly shaping global finance.
The Debate — Roundtable of Experts
Lee Samaha (Motley Fool, Bullish):
“Orforglipron still matters. It outperformed Novo’s older pill, Rybelsus. Because it’s cheaper to make, it will scale faster and attract more insurance coverage. Even 10% weight loss is clinically meaningful and commercially viable.”
David Jagielski (Motley Fool, Bullish):
“Pfizer and smaller biotechs are out. It’s now a two-horse race: Lilly vs. Novo. Lilly already has blockbuster injectables, so adding pills only strengthens its moat. This is why I remain bullish on Lilly stock in any serious finance newsletter analysis.”
BioPharma Dive Analysts (Bearish):
“At 70x earnings, Lilly was priced for perfection. Investors expected injectables-level results. They didn’t get them. That’s why $100B in value vanished overnight. This is the reality of investing in high-expectation stocks.”
Reuters Health Team (Bearish):
“Plateauing results and 10% dropout rates from side effects are concerning. Novo’s upcoming pill may deliver ~15% weight loss, which could put Lilly in second place in the oral race.”
Kamal Sharma (Investing.com Contributor, Bearish on Lilly, Bullish on Novo):
“Lilly’s numbers are trending down: 12.4%, then 10.5%, now 9.2%. They compare to Novo’s old pill instead of its new high-dose version. For readers of any personal finance newsletter, the takeaway is clear: Novo’s oral candidate is the stronger bet.”
Don Tracy (Applied Clinical Trials, Bullish):
“Step back: Q2 revenue rose 38% to $15.6B, margins are at 84%, and R&D is 21% of revenue. Lilly’s pipeline is deep: Retatrutide has shown 25% weight loss while preserving muscle. Lilly isn’t just one pill — it’s a platform company in obesity and diabetes.”
Priya Deshmukh (DL News, Bearish):
“Valuation risk is real. Analysts cut 2028 free cash flow forecasts by $5B, from $31B to $26B. Novo’s CagriSema and Amycretin are potential leapfrogs. In a stock market context, investors could be overpaying for Lilly’s dominance.”
Rajiv Menon (Retail Investor & Macro Commentator, Bullish Sector View):
“This is a megatrend. Obesity and diabetes are global crises. I treat Lilly as a downward averaging stock: buy dips, take profits at targets. Over 2–3 years, I expect 40–50% returns. In a long-term finance newsletter portfolio, Lilly and Novo both deserve a place.”
Balance-Sheet Breakdown
Revenue: $15.6B in Q2 2025 (+38%).
Guidance: $60–62B for 2025 (raised by $1.5B).
Margins: 84% gross profit.
R&D: $3.3B, 21% of revenue.
Free cash flow forecast: cut from $31B → $26B for 2028.
Beta: 0.44, less volatile than the market.
Retail Investor Takeaways (Personal Finance Newsletter Lens)
This is a sector play: obesity and diabetes drugs will define healthcare and stock markets for the next decade.
Lilly is a buy-on-dips stock: accumulate on pullbacks, sell gradually on rallies.
Expect 40–50% returns in 2–3 years if the sector keeps growing.
Risk: Lilly trades at a premium — any slip leads to sharp drops.
The India Story — Global Growth Catalyst
Lilly plans to launch its pill in India, home to one of the largest obesity and diabetes populations. With 135M overweight people, India could become the biggest oral GLP-1 market in the world. Pills are easier to adopt than injections in a country with limited healthcare infrastructure. But affordability and generic competition remain risks.
Comparing Eli Lilly vs. Novo Nordisk
Efficacy: Lilly’s pill: 9–12% weight loss. Novo’s next-gen pill: ~15%.
Pipeline: Lilly: Retatrutide (25% weight loss), Bimagrumab (muscle preservation). Novo: CagriSema, Amycretin.
Scale: Lilly: 21% of revenue into R&D, aggressive capacity buildout. Novo: innovation-driven, but supply bottlenecks remain.
Valuation: Lilly ~$700B, Novo ~$600B. Lilly trades at a higher premium.
Geography: Lilly entering India. Novo strong in Europe and U.S.
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The Bigger Picture
For readers of any stock market newsletter or personal finance newsletter, the lesson is clear: Eli Lilly is both brilliant and fragile. Brilliant because it is reshaping how the world fights obesity. Fragile because its valuation means it must always beat expectations. Novo is closing in with stronger oral data, making this one of the most exciting rivalries in finance today.
Final Word
Eli Lilly remains a leader, but competition is fierce. Investors should treat this as a sector play: own Lilly for scale and safety, own Novo for innovation and potential upside. For long-term portfolios, both are essential to capture the growth of one of the biggest healthcare markets in history.