Fiona Yu Column | With Novo Nordisk’s core focus on diabetes, can GLP-1 drugs truly dominate across the board?

Finally, building on the success of Rybelsus—the world’s first oral biologic—Novo Nordisk is actively working to convert other biologics from injectable to oral formulations, thereby offering greater convenience for millions of chronic disease patients. 7. Conclusion According to 2019 sales data, Novo Nordisk ranked 15th globally among pharmaceutical companies, with revenues of $18.36 billion. Compared with peers of similar scale, Novo Nordisk markets the fewest approved drugs and maintains the simplest R&D pipeline—yet it achieves extraordinary financial results that others, despite exhausting every possible strategy, cannot match. So what explains its seemingly effortless success? Let’s examine its corporate strategy closely. Go back 100 years: insulin’s journey from Canada to Northern Europe was pure serendipity—not strategic design. Professor August Krogh, co-founder of Nordisk (and 1920 Nobel Laureate in Physiology or Medicine), brought the insulin extraction method back to Denmark perhaps simply to treat his wife’s diabetes—and earn some extra income. In that era, there was no formal business management theory, no capital market hype, no concept of IPOs, and no foresight into humanity’s future healthcare needs. Many great companies were born this modestly and pragmatically—‘timely emergence’ driven by real-world need. Over decades of growth—nourished by countless favorable conditions—Novo Nordisk’s strategy gradually crystallized: concentrate virtually all strategic resources on diabetes, a major global disease, continuously build technological and talent advantages, and steadily eliminate competitors. Although the company has since expanded into related therapeutic areas—including obesity, hemophilia, and growth disorders in the past, and now NASH and cardiovascular diseases—it still derives approximately 80% of its revenue from diabetes treatments. To borrow a popular advertising slogan: “Excellence stems from focus!” Sanofi once held Lantus—the former global best-selling insulin—but in 2019 withdrew entirely from the diabetes space, unable to withstand fierce competition from Novo Nordisk and Eli Lilly, ultimately divesting part of its diabetes-related assets. For decades, Eli Lilly and Novo Nordisk have engaged in head-to-head rivalry within diabetes: initially competing on insulin technology, then fiercely contesting GLP-1 innovations. Novo Nordisk launched liraglutide—a once-daily injection—first; Eli Lilly quickly responded with dulaglutide—a once-weekly injection. Unwilling to cede ground, Novo Nordisk then launched semaglutide—a once-weekly injection—and followed up with the world’s first oral version of semaglutide, also dosed once weekly. Facing this groundbreaking oral biologic, Eli Lilly felt immense pressure. Yet it pinned its hopes on a GLP-1/GIP dual agonist, already in Phase II trials; if successfully approved, the competitive drama between the two giants will continue. Overall, however, over much of history Eli Lilly has held superior capital resources, scientific capabilities, and market share—but its broad therapeutic diversification diluted focus. Consequently, its long-standing leadership in diabetes has gradually been overtaken by Novo Nordisk.

NVO Research | Novo Nordisk vs. Eli Lilly: The duopoly battle for the ‘taxation rights’ over global healthcare systems

Let’s put this number in context: Pfizer trades at 14x, Merck at 13x. The market now prices Novo Nordisk—a former high-growth star—as a 'zero-growth traditional pharma company.' This represents an extreme valuation misalignment. Base Model Data (Q4 2025): ・P/E: 13.59x ・EPS: $3.63. Profitability remains robust—EPS is not negative. The company is still generating profits; investors simply believe its future earnings power is gone. ・Compared to Eli Lilly: As analyzed earlier, Lilly trades at 55x P/E. Once twin titans of the sector, their valuations now diverge by 4x—indicating the market believes 'Lilly won, Novo Nordisk lost.' Bayesian Probability Scenario Analysis (Next 1–3 Years): Scenario A: Comeback (Bull Case) – Probability 20% ・Assumption: Amycretin (oral anti-obesity drug) delivers stunning Phase I data—exceeding Zepbound in weight loss efficacy—triggering a sharp reversal in market sentiment. ・Valuation logic: Re-rating to growth-stock multiples—30x P/E. ・Predicted share price: $120+ (more than doubling) Scenario B: Duopoly Restoration (Base Case) – Probability 40% ・Assumption: Market overreacted. Though Lilly holds an edge, the obesity market is vast (hundreds of millions of patients), easily accommodating two dominant players. CagriSema (Novo Nordisk’s next-generation combination therapy) shows strong clinical data. ・Valuation logic: Valuation recovery to slightly above industry-average—20x P/E. ・Predicted share price: $4.00 EPS × 20 = $80 (a 62% upside) Scenario C: Nokia Moment (Bear Case) – Probability 40% ・Assumption: Lilly’s next-generation drug retatrutide launches with overwhelming superiority over Wegovy. Oral obesity drugs are captured by Pfizer or Roche. Novo Nordisk devolves into a low-growth insulin-only company. ・Valuation logic: Sustained 'utility-like' valuation of 12x–13x P/E. ・Predicted share price: $3.80 EPS × 12 = $45.60 (continued gradual decline) Weighted Expected Value: ($45.60 × 0.4) + ($80 × 0.4) + ($120 × 0.2) = $74.20 Margin of Safety: Current share price ($49.25) is far below the expected value ($74.20). Conclusion: Offers a substantial margin of safety (~50%). This appears to be a classic 'contrarian investment' opportunity. Part III: Simulated Expert Interviews & Falsification (Scuttlebutt & Disconfirmation) Simulated Expert Perspectives (Scuttlebutt): ・Pharmaceutical Sales Representative: 'Doctors do prefer prescribing Zepbound—it’s slightly more effective. But Wegovy’s brand recognition is so strong that many patients specifically request it. Right now, Novo Nordisk’s bottleneck isn’t demand—it’s supply capacity.' — Demand remains solid; supply is the constraint. ・Hedge Fund Manager: 'We’re long Lilly and short Novo Nordisk—a classic “pairs trade.” We believe Lilly holds the technological edge. But at just 13x P/E, Novo Nordisk looks so cheap we’re considering covering our short position.'