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Eli Lilly (NYSE:LLY) shares slid more than 3% on Wednesday after reports emerged that Novo Nordisk (NYSE:NVO) has struck a licensing deal with Septerna (NASDAQ:SEPN) to co-develop obesity, Type 2 diabetes, and metabolic therapies.
Under the agreement, Novo Nordisk could pay Septerna up to $2.2 billion in milestones, bolstering its pipeline beyond the high-selling Wegovy injectable. Wegovy generated more than $8 billion in 2024 but faces growing competition as investors eye a $150 billion obesity market.
Novo Nordisk already secured U.S. regulators' acceptance of an oral Wegovy submission, potentially the first pill for obesity. Meanwhile, Eli Lilly's Zepbound injection has gained traction, prompting both firms to race toward more convenient weight?loss pills.
Investors will watch upcoming trial readouts and regulatory decisions closely. As Novo Nordisk and Eli Lilly vie for obesity leadership, each licensing move and clinical milestone is likely to sway market sentiment.
This article first appeared on GuruFocus.