The Pill Race Is Reshaping the Investment Case for Weight-Loss Drug Makers

The next stage of the weight-loss drug boom is being swallowed, not injected, and the UAE has put itself at the front of that queue. It became only the second country globally to approve both Eli Lilly's Foundayo and Novo Nordisk's oral Wegovy, with the Wegovy pill launching in the UAE before anywhere outside the US. Josh Gilbert, Lead Market Analyst at etoro states that matters because the next wave of growth is likely to come from moving these treatments beyond injections and into daily pills, and with the latest UAE National Health Survey showing 22.4% of adults living with obesity, that's a big market sitting right at home.

Just how hard Lilly and Novo are fighting for that growth is now on show in a US courtroom, with Novo suing its rival over advertising claims. The lawsuit won't move the investment case on its own, but it shows this trade is no longer about making enough doses, the fight now is for the patient.

The harder question for investors is which company to own, because these are no longer the same investment. Lilly remains the strongest business in the category, growing first-quarter revenue by 56%, with Mounjaro sales up 125% and Zepbound up 80%, while its pipeline keeps extending its lead. Foundayo gives Lilly an oral option, and its next-generation injectable retatrutide recently delivered average weight loss of 20.8% and 22.6% in two further late-stage trials, with Lilly now planning to submit it for US approval in the first quarter of 2027.

The challenge is that investors are already paying heavily for that leadership. Lilly trades at roughly twice Novo Nordisk's forward earnings multiple, and when you're paying that premium, the bar for disappointment is unforgiving.

Novo is the recovery story, with shares down 24% in the last 12 months. Its underlying first-quarter sales fell 4%, with US sales down 11% as pricing pressure offset volume growth. Yet obesity-care sales still rose 22% and its oral Wegovy launch has been strong, while the UAE arrival of the Wegovy pill gives Novo a chance to build its position in a market that has moved quickly to approve and adopt new treatments.

For UAE investors, the rapid local rollout of oral GLP-1 treatments strengthens the long-term demand story for both companies. When looking at both businesses, the decision comes down to paying a premium for the proven leader or backing a comeback from the company that started the boom.