Mounjaro, Ozempic: Obesity market shifting to portfolio play as GLP-1 innovation peaks, says leading bank

Goldman Sachs reports the obesity drug market is transitioning from blockbuster GLP-1 dominance to a portfolio-driven landscape, characterized by the emergence of oral treatments, market fragmentation, and a pivot to next-generation therapies like amylin. Eli Lilly demonstrated stronger momentum at EASD with positive physician feedback on its oral orforglipron and promising early data for its amylin agent eloralintide, positioning it favorably over Novo Nordisk near-term. Goldman emphasizes that future success hinges on broad offerings and navigating increasing pricing and reimbursement pressures, making the overall "obesity trade" more challenging despite maintaining 'buy' ratings on both firms.

Analysis

According to Goldman Sachs, the obesity drug market is undergoing a strategic shift from reliance on single blockbuster GLP-1 drugs to a portfolio-based approach, driven by three key trends: the introduction of oral therapies, growing market fragmentation, and a pivot towards next-generation treatments. Eli Lilly (LLY) has emerged with significant near-term momentum following the European Association for the Study of Diabetes (EASD) meeting, where its oral drug, orforglipron, received more positive physician feedback than Novo Nordisk's (NVO) oral Wegovy. Furthermore, Lilly's next-generation amylin agent, eloralintide, is viewed as a leading candidate after showing 13% weight loss in early studies, contrasting with a cooler reception for Novo's cagirlintide. The market is also acknowledging the potential of oral pills to become a first-line therapy for a substantial patient segment (25-40%) who prefer convenience or cannot tolerate injectables. This evolving landscape, which includes interest in Amgen's durable MariTide and innovation from Chinese firms, is making the "obesity trade" more complex. Investors face unresolved debates on market size and pricing, compounded by tightening US insurance coverage that elevates the importance of the cash-pay channel and competitive pricing strategies. While Goldman maintains 'buy' ratings on both LLY and NVO, it sees Lilly as better positioned in the near term, with success for all players now hinging on a broad, differentiated portfolio and skillful navigation of reimbursement pressures.

Key Decisions for Investors

• Given Eli Lilly's stronger near-term pipeline momentum and positive feedback on orforglipron, investors may consider its relative positioning against Novo Nordisk, which faces a cooler reception for its newer candidates.
• Monitor key upcoming catalysts, including Eli Lilly's phase 2 eloralintide data in November and Novo Nordisk's Q4 Alzheimer's trial results, as these events could significantly influence stock performance and competitive standing.
• Recognize that the "obesity trade" is becoming more difficult; prioritize companies with broad, multi-mechanism pipelines and a clear strategy to address pricing pressures from tightening insurance coverage and a growing cash-pay market.
• Broaden surveillance beyond the two market leaders to include emerging players like Amgen, whose MariTide is noted for durability, and innovative Chinese biotechs, which could become significant competitors.