Novo Nordisk (NVO) and Eli Lilly (LLY) Face Acquisition Pressure Amid Obesity Drug Success

Dec 17, 2024

Novo Nordisk (NVO) and Eli Lilly (LLY, Financial), leaders in the obesity drug market, are projected to amass $80 billion in cash reserves by 2028 due to their drugs' success. With minimal competition, both companies are expected to maintain strong growth, with Novo Nordisk's revenue growing 16% annually and Eli Lilly's by 20% over the next five years. However, the pressure to invest this cash is mounting as patents expire and competitors like Roche and AstraZeneca (AZN) enter the market. Eli Lilly recently acquired Morphic for $3.2 billion, increasing pressure on Novo Nordisk to invest, possibly in Zealand Pharma or Argenx (ARGX). Both companies risk overpaying in acquisitions as they compete for new growth avenues.

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I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.

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