$Novo-Nordisk A/S (NVO.US)$ The newly developed weight-loss drug CagriSema underperformed in clinical trials, leading to a Market Cap loss of up to 100 billion dollars.

CagriSema averaged a weight loss of 22.7% for patients, below the company's expected 25%. Additionally, only 57% of patients could tolerate the maximum dosage, suggesting that the drug may have difficult-to-manage side effects.

This setback comes right after Novo-Nordisk announced in September that its experimental weight-loss pill monlunabant had failed to meet market expectations. Novo-Nordisk's stock price plummeted more than 20% on Friday, dropping over 40% from its peak.

Eli Lilly and Co has become the new "king of weight loss."

Novo-Nordisk A/S's setbacks undoubtedly benefit its competitor Eli Lilly and Co. $Eli Lilly and Co (LLY.US)$ The weight loss drug Zepbound appears to be more effective than Novo-Nordisk A/S's Wegovy, and currently there are no strong competitors in the short term. Eli Lilly and Co's stock rose 4.7% on Friday.

Currently, Novo-Nordisk's forward PE for 2025 is 21 times, while Eli Lilly's is 35 times.

However, Eli Lilly also faces its own challenges. Kevin Gade, the portfolio manager of Bahl & Gaynor, noted that Eli Lilly will encounter two key moments next year:

First, investors will pay attention to the company's ability to reverse the sales shortfall of diabetes and weight loss drugs from last October with the first quarter Earnings Reports in February.

Secondly, the clinical data for the oral weight loss drug orforglipron, to be released later this year, may open up a huge market opportunity for Eli Lilly and Co.

Prospects and challenges of the weight loss drug market.

In the past few years, the duopoly of Novo-Nordisk A/S and Eli Lilly and Co in the weight loss drug sector has created over 1 trillion dollars in Market Cap growth for investors. However, surpassing current treatment effectiveness in the future will not be easy.

Commercial promotion also faces many obstacles. The explosive growth in early demand led to supply bottlenecks, and expanding the market to a wider population still has unresolved insurance coverage issues: will employers generally accept these drugs? Will Medicare fully cover them? Without broader insurance coverage, the market size may struggle to meet Wall Street's ambitious forecasts.

Kevin Gade stated: "Easy money has already been made. Achieving annual sales of 50 billion dollars is feasible, but reaching some Analysts' forecast of 150 billion dollars requires some 'gymnastics' to make the numbers work."

Editor/lambor