Lilly sees strong growth in 2026 as weight-loss drug rival Novo slips

By Mrinalika Roy and Mariam Sunny

Feb 4 (Reuters) – Eli Lilly forecast strong growth for 2026 on Wednesday on the back of surging obesity drug demand, shaking off pricing pressures that helped sink rival Novo Nordisk’s outlook.

The U.S. drugmaker expects a roughly 25% increase in revenue this year while Novo’s sales are expected to fall between 5% and 13% in 2026, in the clearest sign of the rivals’ divergent paths in a market increasingly driven by consumer demand rather than insurance coverage.

Lilly’s successes have boosted its market value to more than $1 trillion, the first pharmaceutical company to reach that milestone, while Novo shares have sunk 40% over the last year. On Tuesday the Danish drugmaker warned investors of “unprecedented” pricing pressure in 2026.

Shares of Lilly, which overtook Novo as the weight-loss drug market leader last year, were up more than 8% in early trading.

Novo last month rolled out an oral version of Wegovy at an initial price of $149, ahead of an expected April regulatory decision for Lilly’s rival weight-loss pill.

Eli Lilly forecast a 2026 profit of $33.50 to $35 per share, with the low end of the range above analysts’ average estimate of $33.23, according to LSEG data. It projected full-year sales of $80 billion to $83 billion, well ahead of Wall Street estimates of $77.62 billion.

For the fourth quarter, Lilly reported a profit of $7.54 per share. Analysts were expecting $6.67. Revenue rose to $19.3 billion, ahead of Wall Street expectations of $17.96 billion.

The strong quarter and outlook “reminds us that while Lilly and Novo play in the same markets, the pressures they face are not identical,” said BMO Capital analyst Evan Seigerman.

PRICING PRESSURES

Investor focus is squarely on how Lilly will navigate mounting pricing pressure after its deal with the Trump administration, which promised steep price cuts for its obesity treatments for the government Medicare and Medicaid programs and for cash payers. 

Sales of diabetes drug Mounjaro, which has the same active ingredient as Zepbound, came in at $7.41 billion for the fourth quarter, compared with analysts’ expectations of $6.63 billion.

Zepbound recorded sales of $4.3 billion for the quarter, above estimates of $3.41 billion.

The company said U.S. sales for Zepbound were driven by volume, offset by some price decreases, and that international sales of Mounjaro, the branded name for both diabetes and weight-loss outside the U.S., were driven primarily by volume.

Novo’s Wegovy and Lilly’s Zepbound, which initially retailed for about $1,000 a month at U.S. pharmacies, are now sold on company websites for starting prices of $199 to $299 after political pressure to lower costs.

Cantor analyst Carter Gould said the new forecast should help assuage fears over whether market expansion can drive meaningful growth despite pricing pressures.

“The high-end, the low-end, the narrower guide – all of it – express a far more confident view of the market than most of the Street were anticipating,” he said. 

Novo warned that its similar agreement with the U.S. government will shave 2% to 4% off revenue this year, while Lilly said higher patient volumes should help cushion that blow.

There is also building interest around the expected launch of Lilly’s oral weight-loss drug, orforglipron, seen as an important future growth driver. The pill is under U.S. FDA review, with a decision expected in April.

Both companies have been moving aggressively in the cash-pay market. Novo is selling lower doses of its daily pill in the United States for $149 a month, rising to $199 from April. Lilly has said it plans to cap the price of higher doses of its obesity pill, if approved, at $399 a month for repeat cash-paying patients.

(Reporting by Mariam Sunny and Mrinalika Roy in Bengaluru; Editing by Anil D’Silva and Bill Berkrot)