The stock price of Novo Nordisk, a Danish pharmaceutical company holding the obesity treatment drug Wegovy, plummeted 21.83% on the 29th (local time), causing its market capitalization to evaporate by $70 billion (approximately 96 trillion won).
This was influenced by Novo Nordisk's announcement that it would lower its earnings outlook for the year. The company significantly reduced its overall revenue growth forecast from the previously presented 13-21% in May to a much lower range of 8-14%. Its annual operating profit growth forecast was also substantially decreased from 16-24% to 10-16%.
Heo Hye-min, a pharmaceutical and biotech researcher at Kiwoom Securities, explained, "The growth of Wegovy in the United States is slowing down, and the lower-than-expected penetration rate in other countries is a major factor." In fact, global Wegovy sales in the first quarter of 2025 amounted to 17.36 billion Danish kroner (3.7141 trillion won), which increased by 83% compared to the same period last year but was 7% lower than market expectations.
There were interpretations that not only the lowered earnings forecast but also the change of the CEO affected investor sentiment. On the same day, Novo Nordisk appointed Maziar Mike Doustdar, the vice president of its international business division, as the new CEO, who will start his duties on August 7. Lars Fruergaard Jørgensen, the CEO who led the company for eight years, resigned last May.
As the alarm went off for Novo Nordisk, which had once ranked first in European market capitalization after the launch of Wegovy, the stock price of its competitor in the diabetes and obesity treatment sector, Eli Lilly, also fell by about 5% on the same day. Brian Mulberry, a manager at Jacks Investment Management in the United States, analyzed, "The signs of slowing down in Novo Nordisk's obesity and diabetes medication market triggered a general sell-off that led to the decline in Eli Lilly's stock price."
Both Wegovy from Novo Nordisk and Zepbound from Eli Lilly are drugs that mimic the glucagon-like peptide (GLP)-1 hormone, initially developed as diabetes treatments for their effect of promoting insulin secretion to regulate blood sugar, later confirmed to have weight loss effects, thus evolving into obesity medications.
In their initial launch, both drugs gained immense popularity to the extent that their supply could not keep up with demand, leading to shortages in the United States. At one point, the U.S. Food and Drug Administration (FDA) allowed the production of generic drugs as an alternative to the supply issues of Wegovy and Zepbound.
Recently, as the supply of obesity medications has expanded, the supply and demand issues have been resolved. However, concerns about weight gain when medication is stopped, including the yo-yo effect and muscle mass reduction, have led to speculation that consumer expectations and demand may have lessened, contributing to the sell-off.
However, some evaluations note that since Eli Lilly's obesity treatments are leading the U.S. market, the slowdown in the growth of obesity treatments is not solely a problem for Novo Nordisk. There are also interpretations suggesting that the crisis for competitors could actually be beneficial for Eli Lilly.
According to Reuters, Zepbound has surpassed Wegovy in the U.S. market share competition, capturing about 60% of the market. Eli Lilly reported that Zepbound's sales in the first quarter of this year increased by 45% compared to the same period last year, reaching $12.7 billion (approximately 17 trillion won).
The market anticipates that Eli Lilly's earnings announcement next week will determine the direction of the company's stock price. Emily Field, an analyst at Barclays Investment Bank, noted, "Eli Lilly needs to report strong financial performance to reassure investors."
The growth of the obesity medication market could also be influenced by new drugs. Both companies are looking for new growth engines that can surpass existing obesity treatments. Both are developing oral obesity medications to improve patient convenience, moving away from traditional injectables. Lilly has stated that it will release clinical trial results for its oral obesity treatment orforglipron by the end of this year.
Meanwhile, concerns about the sluggish sales of Novo Nordisk's Wegovy are not limited to the U.S. Eli Lilly will be launching Manjaro in Korea next month, breaking Wegovy's dominant position. Korea's Novo Nordisk Pharmaceuticals has collaborated with Julic Pharma (distributor) and BlueMTec (wholesaler) for the domestic sales distribution of Wegovy, and it has recently been confirmed that they are discussing joint sales with domestic pharmaceutical companies such as Chong Kun Dang.