Weight loss drugs represent arguably the hottest growth opportunity in the healthcare sector. What began as treatments for type 2 diabetes has expanded into the broader weight management space, creating a market that Morgan Stanley projects could grow from $15 billion last year to $150 billion by 2035.
Two pharmaceutical companies currently dominate with injectable treatments, but competition is intensifying as next-generation therapies near regulatory approval. Oral formulations could dramatically expand the addressable patient population beyond those willing to use injections, making the race to market with effective pill versions a crucial battleground. Three companies stand out as they compete for position in this massive opportunity.
Eli Lilly (LLY)
Eli Lilly has become the leading obesity drug company in the United States. The pharmaceutical giant sells tirzepatide under two brand names: Mounjaro for type 2 diabetes and Zepbound for chronic weight management. Between them, these products have an estimated 1.1 million active prescriptions in the United States.
The company has dramatically expanded market share over the past year, capitalizing on competitive challenges facing its primary rival. This momentum positions Eli Lilly as the current clubhouse leader in U.S. obesity drug sales.
Pipeline Advantages
Eli Lilly’s next-generation pipeline could extend its competitive lead. The company is developing orforglipron, a once-daily oral GLP-1 medication for type 2 diabetes and obesity. Eli Lilly hopes to submit for final approval to launch orforglipron later this year.
The company is also developing retatrutide, a triple-hormone-receptor agonist, as its next subcutaneous obesity drug. These innovations could enable Eli Lilly to build on recent momentum in an addressable market that spans far beyond its current 1.1 million patient count.
Market Opportunity
The obesity drug market extends well beyond current patient numbers. Tens of millions of Americans struggle with obesity and related metabolic conditions, creating enormous expansion potential as supply constraints ease and insurance coverage expands.
Eli Lilly’s combination of current market leadership, manufacturing scale, and next-generation pipeline positions the company to capture significant share of the projected $150 billion market by 2035.
Novo Nordisk (NVO)
Dividend Yield: 3.18%
Novo Nordisk remains a prominent force despite losing U.S. market share recently. The company’s semaglutide serves as the active ingredient in Ozempic for type 2 diabetes and Wegovy for obesity. These drugs have approximately 968,000 U.S. prescriptions and Novo Nordisk holds roughly 71% of the international GLP-1 market.
Challenges and Response
The company has faced significant pressure from telehealth companies selling compounded semaglutide—essentially copycat products made at customized dosages. This challenge became problematic enough that Novo Nordisk cut its outlook and the CEO stepped down earlier this year.
However, Novo Nordisk has a potential catalyst that could reverse its recent struggles. The company plans to combat compounded obesity drugs with a pill version of Wegovy, which would be the first GLP-1 pill to reach the market if it launches before Eli Lilly’s orforglipron.
The Oral Formulation Opportunity
Since the oral version utilizes semaglutide, which has already proven effective and popular among patients, it could persuade individuals using compounded subcutaneous treatments to switch. Most people would likely prefer a pill to an injection, creating natural patient demand for oral formulations.
Novo Nordisk has already submitted its formal application to the FDA and could receive a decision by year-end. News of approval would likely reinvigorate this slumping pharmaceutical giant and demonstrate that the company can compete effectively despite recent setbacks.
The 3.18% dividend yield provides income while investors wait for the oral Wegovy decision and longer-term market development.
Viking Therapeutics (VKTX)
Market Cap: $4 billion
Viking Therapeutics represents the speculative opportunity among obesity drug stocks, offering potential for outsized gains if its experimental drug succeeds commercially. The company could emerge as a new challenger to the current duopoly of Eli Lilly and Novo Nordisk.
VK2735 Development
Viking’s experimental drug, VK2735, is a dual GLP-1/GIP agonist similar to tirzepatide, Eli Lilly’s proprietary compound. Importantly, Viking is developing both subcutaneous (phase 3 trials) and oral (phase 2 trials) versions.
While the oral formulation’s recent trial results included some side effect issues, VK2735 has demonstrated strong efficacy. The drug appears poised to be competitive if it wins regulatory approval and reaches the market.
Risk-Reward Profile
Viking’s $4 billion market cap leaves significant room for investment upside if the company successfully establishes itself in the obesity drug space. For comparison, Eli Lilly’s market cap exceeds $760 billion while Novo Nordisk sits at $183 billion.
However, the stock carries substantially higher risk than established competitors. Viking hasn’t brought a product to market yet and generates no revenue. The stock has been volatile and currently trades over 60% below its all-time high.
Catalyst Timeline
Viking could see significant stock movement heading into fall or next year as Wall Street anticipation builds for updates on the subcutaneous version of VK2735. Phase 3 trial data and regulatory filing timelines will drive near-term sentiment.
For investors comfortable with clinical-stage biotech risk, Viking offers leveraged exposure to obesity drug market growth. Success would generate returns far exceeding what’s possible from Eli Lilly or Novo Nordisk given their already-large valuations. Failure, however, could result in substantial losses.
Each of these stocks offers a different path into the weight loss revolution—Eli Lilly for current leadership, Novo Nordisk for a turnaround play with income, and Viking for speculative upside. The market appears large enough for multiple winners, though competitive positioning over the next decade will depend on who reaches market first with the most effective oral formulations.