The news: In its Q3 earnings report, Novo Nordisk lowered its full year sales forecast for the third time this year as it continues to lose ground to Eli Lilly in obesity and diabetes.

Digging into the details: Sales of Novo’s obesity drug Wegovy and type 2 diabetes medicine Ozempic grew but at a slower pace in Q3.

• Wegovy topped $3.1 billion for the quarter, up 18% YoY, slightly less than expectation and down from 67% YoY growth in Q2.
• Ozempic sales reached $4.7 billion, up 3% YoY, meeting investors’ expectations but down from 15% YoY growth in Q2.
• Lilly reported Q3 triple-digit growth YoY for both its obesity drug Zepbound and diabetes med Mounjaro last week.
• Lilly took the US GLP-1 market share lead in January and accounted for 58% of total prescriptions to Novo’s 42%, per IQVIA data in September shared in Lilly’s Q3 presentation.

Zooming out: Novo finalized Inflation Reduction Act negotiations and accepted the US maximum fair price for semaglutide, which is the active ingredient in Wegovy, Ozempic and its type 2 diabetes pill Rybelsus. Novo did not reveal the agreed-upon price, but said it will have a low-single digit impact on sales.

Novo and Lily are finalizing deals with the Trump administration to give deep discounts on weight loss drugs—reportedly $149 per month for the lowest doses—and in return get Medicare coverage. About 12.5 million US adults on Medicare would qualify for anti-obesity medication, per CBO analysis.

Novo aims to build out its obesity drug portfolio with the acquisition of biotech Metsera after Pfizer first bid $7.3 billion. Pfizer raised its offer to $8.1 billion, but CEO Mike Doustdar told CNBC on Wednesday he’s confident Novo $10 billion bid will close the deal.

Why it matters: GLP-1 market share swung from Novo to Lilly particularly in the US, but there’s a new battle on the horizon that both hope to win in next generation oral medicines for weight loss.

• Novo filed its application for the Wegovy pill in May and expects an FDA decision the end of the year. It’s planning an early 2026 launch.
• Lilly hasn’t filed for approval of its candidate orforglipron, but plans to by the end of the year. Lilly noted the pill meets the criteria for a new FDA fast-track program that promises to cut drug approvals down to 1 or 2 months.
• Novo published clinical data on Wednesday showing its 25 mg Wegovy pill matches its injectable weight loss efficacy at around 15% reductions, while also lowering cardiovascular risks.

What it means for pharma companies: Novo’s next opportunity to close the gap with Lilly lies with the Wegovy pill. Novo is set to be first to market with a next generation weight loss pill and a potential new swath of customers who don’t like needles or prefer the convenience of a pill. Along with its own direct-to-consumer (D2C) NovoCares platform, Novo is lining up telehealth partners like Ro, WeightWatchers, and possibly Hims & Hers, to make online access as seamless as possible as soon as it's approved.

But its edge may not last long. Lilly is already manufacturing billions of doses of orforglipron pills in anticipation of approval. With at least 27 other next-generation oral GLP-1 candidates in the pipeline, Novo’s, Lilly’s, and other new entrants’ GLP-1 success depends on who can pair effective science with seamless access and consumer-friendly experiences.

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