Novo Nordisk and Eli Lilly: GLP-1 Competition Is Coming From Public and Private Challengers

We’re maintaining our $580 fair value estimate for Eli Lilly and DKK 600/$86 fair value estimates for Novo Nordisk after analyzing the public and private competitive landscape for obesity drugs through 2031. New public and private entrants are emerging to challenge the leading positions of Novo Nordisk and Eli Lilly in a potential $200 billion total GLP-1 market, which we expect will see 68% of sales from weight loss indications by 2031. Given first-mover advantages and innovation with next-generation products, we expect Novo and Lilly to retain two thirds of the total market by 2031, reinforcing their wide moats. However, we view both stocks as overvalued.