The news: Executives at GLP-1 rivals Novo Nordisk and Eli Lilly once again struck sharply different tones while discussing their Q2 earnings reports on Wednesday morning. While Novo’s new Wegovy pill prescriptions are surging, the drug's sales still disappointed investors and pills account for a relatively small share of overall GLP-1 sales. Novo CEO Mike Doustdar acknowledged additional R&D pipeline setbacks. Meanwhile, Lilly continues to post strong sales growth from its established injectable GLP-1 blockbusters, Zepbound and Mounjaro.

Digging into the details: Both companies beat topline revenue estimates and raised full-year guidance. Lilly continues to control the GLP-1 injection market, while Novo maintains its early lead in the weight loss pill race. Overall, Lilly says it has about a 61% share of the US GLP-1 market.

• Injectable GLP-1s: Lilly’s Q2 Mounjaro sales jumped 91% YoY, including a 172% increase outside the US, while Zepbound sales rose 44%. By comparison, Novo's US Ozempic sales rose 2% and international sales increased 10%, while US Wegovy sales fell 22% despite a 46% jump internationally.
• Oral GLP-1s: Novo’s Wegovy pill has reached 5 million prescriptions since its January launch, and the last million took just one month versus nearly three months for the first million. Meanwhile, Lilly’s Foundayo has only about 10% of the GLP-1 pill market. Wegovy pill brought in nearly $500 million in Q2 sales, far higher than Foundayo’s $98 million.

Why it matters: Topline earnings beats mask Lilly's widening lead in the GLP-1 market, while Novo's strong start in the pill category has done little to reassure investors. Lilly shares rose 4% after earnings, while Novo's initially fell about 6%.

Despite strong prescription growth for Wegovy pill, Q2 sales missed analyst expectations of roughly $515 million. Foundayo sales also came in below estimates. While both companies are contending with price cuts that pressure net margins, Novo faces greater pressure to make its pill a meaningful growth driver as it seeks to offset its widening disadvantage to Lilly in the injectable GLP-1 market. Wegovy pill currently accounts for only about 4% of Novo's total revenues, though that share is expected to increase significantly as oral GLP-1 adoption expands.

Novo is also facing greater R&D and pipeline challenges than Lilly. Its experimental obesity and diabetes drug CagriSema delivered mixed results, the company just announced, failing to outperform Lilly's tirzepatide on blood sugar control, while its heart drug candidate recently missed a key clinical trial endpoint. Together, the disappointments amount to multiple "setbacks," as CEO Maziar Doustdar acknowledged on Wednesday. Meanwhile, Lilly's experimental obesity drug retatrutide is widely viewed as one of the most promising next-generation therapies, and its overall R&D pipeline is roughly twice the size of Novo's, according to Reuters. And unlike Lilly, whose tirzepatide patents remain well protected, Novo is beginning to face generic semaglutide competition in select international markets where patent protections have expired.

Implications for the GLP-1 market: Use of oral weight loss drugs is expected to keep rising, particularly among first-time GLP-1 users, who currently account for about 80% of Wegovy pill patients, according to Novo. New Medicare coverage will further boost prescription volume over time, helping offset the margin pressure from lower prices. Wegovy pill may be Novo's best chance to narrow the gap with Lilly, but the broader takeaway for drugmakers is that investors are favoring companies with broad pipelines, multiple obesity assets, and diversified growth drivers, particularly over those dependent on products approaching patent expiry.