Key Points

Novo Nordisk remains a step behind Eli Lilly in the weight loss drug market.
Its most promising programs might not be competitive with Lilly's.
They are also very likely to enter the market too late relative to Lilly's entrants, assuming they get approved.

Novo Nordisk (NYSE: NVO) fell by 29% over the last 12 months, and that is making investors antsy about the company's next three years. It is clear that it will not be able to coast on its earnings from sales of Ozempic.

Let us chart out Novo's path over the next three years to see where its stock will be, given that investors have been dumping it recently.

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Its next generation of weight loss programs is facing an awkward issue

Amylin is a pancreatic hormone that signals fullness through a different route than GLP-1 (glucagon-like peptide-1), the gut hormone mimicked by semaglutide, the active ingredient in Wegovy and Ozempic. So, amylin could technically be used alongside semaglutide to suppress appetite and boost weight loss from two different directions. And that is the premise of Novo Nordisk's next generation of weight loss programs.

CagriSema, its candidate that is composed of a combination of cagrilintide (an amylin analog) and semaglutide, went to the U.S. Food and Drug Administration (FDA) in December 2025, with the review expected to conclude this year. In the bull case for Novo's stock, CagriSema will get the green light from regulators and then, starting shortly after commercialization begins, it will take enough market share to become the leading weight loss therapy.

The problem with the bull thesis coming to fruition is that the clinical data about the candidate make it hard to believe.

In an open-label phase 3 trial in 809 adults with obesity, CagriSema showed 23% weight loss at 84 weeks, meaning it lagged the 25.5% for tirzepatide, the already-approved Eli Lilly (NYSE: LLY) medicine sold as Zepbound. CagriSema's side effects were mostly mild to moderate gastrointestinal complaints, so the miss was about efficacy rather than tolerability. The main problem is that it is a newer program that cannot obviously beat Lilly's older program on efficacy based on what is known right now.

Another program that could support the bull case is Novo's amycretin, which is one molecule that hits multiple receptors, in contrast to CagriSema's approach of combining multiple molecules to accomplish that goal. Amycretin's phase 3 obesity trial began dosing in February 2026 and should wrap up in late 2029.

So, by that deadline, it should be clear to the market whether Novo is going to be able to launch a highly competitive weight loss drug, and it will also be clear whether the pharma's upcoming entrant was a success or not.

This business might stay a step behind the competition

The bear case for Novo Nordisk's stock will not need any catastrophes or major inversions of competitive positioning to play out.

For the most part, the bear case calls for retatrutide, Lilly's triple agonist that showed up to 28% weight loss and that is headed for a first-quarter 2027 approval filing, to erode Novo's market share for Wegovy even more than Zepbound already has. In a worst-case scenario, Novo's top line for 2029 could look very much like its top line in 2025. But that is unlikely to happen simply because once patients are on weight loss medicines, they tend to stay on a treatment that works rather than switching.

Thus, the base case is that by mid-2029, Novo's stock will be somewhat higher than today, thanks to a regular drumbeat of decent data from its clinical trials, and from building out its pipeline with ongoing investment in research and development (R&D).

But, at least for as long as Eli Lilly leads the weight loss market on absolute weight loss drug revenue, Novo Nordisk will be struggling a bit. That means it is a bit hard to see a strong argument for buying its stock.

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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Eli Lilly and Novo Nordisk. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.