For Novo Nordisk investors, 2025 was nothing short of devastating. The Danish pharmaceutical giant, once the undisputed leader in the obesity drug revolution, watched its stock plummet approximately 50% in what became the worst year on record for the company. Now, as 2026 begins, Novo is pinning its hopes on a game-changing development: the U.S. launch of oral Wegovy, commonly called "Wegovy-in-a-pill."

The Fall from Grace

Just two years ago, Novo Nordisk seemed invincible. Its GLP-1 medications Ozempic and Wegovy had transformed the treatment of diabetes and obesity, generating tens of billions in revenue and making the company Europe's most valuable.

Then 2025 happened. A profit warning on flagship products sent shockwaves through the market. Eli Lilly's competing drugs Mounjaro and Zepbound gained market share at an alarming rate. A patent lapse opened Canada to semaglutide generics starting January 2026. And the company announced a major restructuring under new CEO Mike Doustdar that included 9,000 layoffs.

"It was a perfect storm of challenges," said Jyske Bank analyst Henrik Hallengreen Laustsen. "Novo went from being seen as untouchable to suddenly looking vulnerable on every front."

The Pill That Could Change Everything

The FDA's December 2025 approval of oral Wegovy gives Novo Nordisk something its rivals don't yet have: a pill form of its blockbuster weight-loss drug. While both Novo's injectable Wegovy and Eli Lilly's Zepbound have proven remarkably effective, many patients remain reluctant to administer weekly injections.

Oral Wegovy, launching in the U.S. in early January 2026, eliminates that barrier. Patients can now achieve similar weight-loss results by simply swallowing a daily pill, dramatically expanding the potential market.

"This is a redemption for investors," Laustsen declared after the approval news. Novo shares surged 9.2% on the announcement, their best single-day performance in months.

The Race Against Eli Lilly

The oral Wegovy launch gives Novo a crucial head start over American rival Eli Lilly, whose own oral obesity drug, orforglipron, isn't expected to receive FDA approval until March or April 2026.

That two-to-three month window could prove decisive in establishing market position. Physicians who begin prescribing oral Wegovy now may be reluctant to switch patients to a competing product later. Insurance coverage decisions being made currently could favor Novo's established relationship with payers.

"First-mover advantage matters enormously in pharmaceutical markets," explained Evan Seigerman, healthcare analyst at BMO Capital Markets. "Novo has a narrow window to cement its position before Lilly catches up."

Eli Lilly's Dominance

Despite the Wegovy pill breakthrough, Eli Lilly remains the clear leader in obesity treatment. The Indianapolis-based company ended 2025 as the world's most valuable pharmaceutical company, with a market capitalization approaching $1 trillion, while Novo Nordisk fell to second place.

Lilly's Zepbound has been taking market share from Wegovy throughout 2025, aided by strong clinical data and aggressive marketing. The company also secured a deal with the Trump administration to offer reduced pricing on some drugs, including Zepbound, potentially improving access.

Analysts now expect Eli Lilly to generate more obesity drug revenue than Novo Nordisk in 2026, a reversal of the companies' historical positions.

The Generic Threat Looms

Adding to Novo's challenges, generic versions of semaglutide became legal in Canada starting January 2026 following a patent lapse. While the U.S. market remains protected, the Canadian development signals that Novo's patent moat is beginning to erode.

Generic competition could eventually pressure pricing in Novo's core products, though that threat remains years away in the crucial American market. Still, investors are pricing in the long-term risk.

What the Numbers Say

Despite its stock collapse, Novo Nordisk remains enormously profitable. The company continues to generate billions in revenue from its diabetes and obesity franchises, and demand for GLP-1 medications far exceeds supply.

The restructuring under CEO Mike Doustdar is designed to streamline operations and accelerate manufacturing capacity expansion. The 9,000 job cuts, while painful, are expected to improve operating margins over time.

"Novo's fundamental business remains strong," noted one European healthcare analyst. "What we're seeing is a valuation reset, not a business collapse."

Investment Implications

For investors, Novo Nordisk presents a classic turnaround opportunity. The stock is trading at approximately half its 2024 peak, despite operating a highly profitable business in a rapidly growing market.

Bulls argue that the Wegovy pill launch, combined with continued strong demand for GLP-1 medications, will drive a recovery in 2026. The company's pipeline includes additional obesity and diabetes treatments that could sustain growth for years.

Bears counter that Eli Lilly has established dominance that will be difficult to overcome, and that the obesity drug market is becoming increasingly competitive with new entrants on the horizon.

The Healthcare Landscape

Beyond the competition between Novo and Lilly, the obesity drug phenomenon is reshaping healthcare broadly. These medications have demonstrated remarkable efficacy, helping patients lose 15-20% of their body weight on average, with benefits extending to cardiovascular health and other conditions.

The challenge has been access. High prices, supply constraints, and insurance coverage limitations have kept these breakthrough drugs out of reach for many who could benefit. Oral formulations like Wegovy-in-a-pill could help address some barriers, though cost remains a significant hurdle.

Looking Ahead

Novo Nordisk's 2026 will be defined by execution. The company must successfully launch oral Wegovy, defend market share against Eli Lilly, and demonstrate progress on its restructuring initiatives.

For a company that lost half its market value in a single year, the stakes couldn't be higher. But in pharmaceutical markets, fortunes can change quickly. If the Wegovy pill captures patient and physician enthusiasm, Novo's redemption story may be just beginning.