The 3 drugs most likely to knock over Novo Nordisk's obesity drug

Novo NordiskS ' (NYSE: NVO) Wegovy currently reigns as the king of the obesity drug market. It generated roughly $4.5 billion in sales last year and is likely to earn even more in 2024.

But notice the use of the word "currently". Wegovy's position at the top of the market is uncertain. Here are three drugs most likely to topple Novo Nordisk's blockbuster drug.

1. Eli Lilly's Zepbound/Mounjaro

Eli Lilly (NYSE: LLY) won US regulatory approval for Zepbound to help patients lose weight in November 2023. In the first quarter of 2024, sales for Lilly's obesity drug reached $517 million.

There is more to the story. Zepbound and Mounjaro are different brand names for the same drug, tirzepatide. Lilly markets Mounjaro in the US as a treatment for type 2 diabetes. In Europe, however, the pharmaceutical giant markets Mounjaro for type 2 diabetes AND weight loss.

Zepbound/Mounjaro works in a different way than Wegovy to help people lose weight. Clinical studies of the two drugs suggest that Zepbound/Mounjaro may achieve greater weight loss. That efficacy advantage could enable Lilly's weight-loss drug to steal the No. 1 spot. 1 market by Wegovy in the not too distant future.

2. Novo Nordisk's CagriSema

Even with Zepbound/Mounjaro breathing down Wegovy's neck, there is good news for Novo Nordisk. The Denmark-based manufacturer has a successor in the works that could help it take on Eli Lilly.

Novo Nordisk is evaluating CagriSema in late-stage clinical studies targeting obesity and type 2 diabetes. CagriSema combines cagrilintide ("Cagri" in the name) with semaglutide ("Sema" in the name, which is marketed under the brand names Ozempic and Wegovy ). The first phase 3 studies for the experimental drug are completed next year, while the others are scheduled to be completed in 2026.

Previous clinical studies of CagriSema found that it helped patients achieve significantly greater weight loss than semaglutide (Wegovy). Even if Lilly's Zepbound/Mounjaro unseats Wegovy, it's possible that CagriSema could enter the market just in time for Novo Nordisk to maintain its overall lead in the obesity drug market.

3. Eli Lilly's Orforglipron

Still, at least one other treatment could give Eli Lilly the edge over Novo Nordisk. Lilly has another promising obesity drug in late-stage testing: orforglipron.

Wegovy and Zepbound are weekly injections, but orforglipron is a once-daily pill. That convenience factor could help Lilly shake up the obesity drug market even more. It should be noted, however, that Novo Nordisk is evaluating an oral version of Wegovy in a late-stage clinical trial.

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Lilly expects its phase 3 studies of orforglipron to be completed next year. This could lay the groundwork for a commercial launch of the drug in 2026 if all goes well.

Others on the horizon

I think Zepbound/Mounjaro, CagriSema and orforglipron pose the biggest threats to Wegovy. However, other promising weight loss drugs are also on the horizon.

Lilly is evaluating retatrutide in phase 3 studies. Like Zepbound, retatrutide is administered by injection. However, it can achieve greater weight loss than Zepbound.

Both Lilly and Novo Nordisk have other experimental obesity drugs in phase 2 testing. So do smaller drugmakers, including Altimune, Structure TherapeuticsAND Viking Therapeutics (NASDAQ: VKTX).

Investors' best bets

All stocks mentioned can be winners. Two of them, however, stand out to me as the best bets.

For more conservative investors, I think Eli Lilly is an excellent choice. The stock's valuation may seem absurdly high with its forward earnings multiple above 63. Still, Lilly has tremendous growth prospects, not all of which stem from its obesity drugs.

If you're a more aggressive investor, you might like Viking Therapeutics. The company is still relatively small, with a market cap of about $6 billion. Its experimental obesity drug VK2735 looked great in phase 2 testing. Viking also has a promising phase 2 candidate targeting nonalcoholic steatohepatitis (NASH). Success in late-stage studies for these programs could allow Vikings' stock to rise in the coming years.

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Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.

Wegovy's precarious position: 3 drugs most likely to topple Novo Nordisk's obesity drug was originally published by The Motley Fool