Novo Nordisk in Obesity: Risk, Reward, and Caution
The first shall be last and the last shall be first. Right now, it seems that Novo Nordisk, the pharmaceutical company that was first to commit and break through with a major advance in obesity is now falling behind Eli Lilly and Company. This is a story of risk, reward, and caution in the competition between Novo Nordisk and Eli Lilly.
Is Novo the big risk taker that paved the way in this tricky market? Or an overly cautious competitor that fell behind? Certainly, there is a bit of truth in both of those narratives.
The Bold Innovation
Chasing a business opportunity in obesity has blown up on many companies. After Wyeth introduced dexfenfluramine for weight management in 1995, links to heart problems led to its withdrawal and costly litigation for product liability. Likewise, Sanofi made a big gamble to develop rimonabant in obesity, but its application for FDA approval hit a brick wall in 2007. That led Sanofi CEO Chris Viehbacher to say the risk for developing an obesity drug was too high for developing any more obesity drugs.
Lilly wasn’t willing to do it. They had a patent for a GLP-1 agonist to treat obesity granted in 2003. Management dismissed it being not worth any effort to develop.
So let’s be clear. The commitment by Novo Nordisk to develop GLP-1 agonists and other drugs for obesity was a big, bold risk for innovation that brought big rewards.
The Excessive Caution
But now that Novo Nordisk is falling behind it is easy for observers to second guess the company for being too cautious. Ellen Chen writes for Stat News that “a cautious culture cost Novo Nordisk its lead in the obesity drug race.”
“I just never felt there was a conviction within Novo to fight through the obstacles,” said Richard DiMarchi, a chemist who has won wide recognition for his groundbreaking research in obesity. He was speaking of Novo’s hesitance to develop a triple agonist for obesity. Now Lilly has one, retatrutide, which is progressing in the final phase of research before marketing approval.
Moreover, the Wall Street Journal reported that Novo’s overly cautious semaglutide forecasts led to shortages that cost the company its leadership in the obesity market.
Hindsight is 20/20.
The Unfinished Story
But remember. This story is not over. Novo started the race well before anyone else and now is scrambling to regain its lead. Many other companies are joining in. Surprises surely lie ahead. But only a fool would count Novo Nordisk out at this point.
Click here and here for the assessments of the Wall Street Journal and Stat News.
Glowing Dice, photograph by Dark Elf Dice, licensed under CC BY-SA 4.0
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June 6, 2025
