Post by : Saif Rahman

Shares of the Danish pharmaceutical company Novo Nordisk experienced a significant increase on Tuesday following the approval of its new weight-loss pill by U.S. health regulators. The stock surged approximately 7.5% in early trading, indicating strong investor confidence in the potential of oral treatments for obesity.

The endorsement from the U.S. Food and Drug Administration (FDA) grants Novo Nordisk a prime position in the expanding weight-loss market. Historically, effective obesity treatments have relied on weekly injections, which many individuals find uncomfortable. The new pill is expected to attract those seeking a more convenient weight management option.

Novo Nordisk is recognized for its injectable weight-loss medication, Wegovy, which was introduced in 2021. Despite high demand for Wegovy, the company initially encountered supply shortages. This time around, company officials have assured that they are well-prepared, claiming to have ample stock of the new pill and a strong strategy for a smooth launch in the United States.

Recently, Novo Nordisk has been under pressure due to a decline in market share, particularly from U.S. competitor Eli Lilly. Lilly's injectable drug, Zepbound, has seen a rise in popularity and currently leads in weekly prescriptions within the U.S. Novo Nordisk’s stock had plummeted over 50% earlier this year, making the FDA approval a crucial lifeline.

Analysts suggest that the pill may provide Novo Nordisk with a temporary edge, as many patients are likely to prefer pills to injections due to needle aversion. Nonetheless, experts caution that this advantage might not be enduring, as Eli Lilly is also working on an oral weight-loss drug expected to seek approval by 2026.

Healthcare investors speculate that oral medications might expand the overall market rather than replace injections, with many adults delaying treatment simply due to aversion to injections. However, experts also express concerns that pills may lack the potency of injectable medications, possibly limiting their effectiveness for certain patients.

Financial projections for the new oral drug are optimistic, with some analysts forecasting annual global sales to reach billions, which could help Novo Nordisk counter potential challenges like decreasing drug prices and increasing market competition by 2026.

On Tuesday, Novo Nordisk's shares were among the top gainers in European exchanges, while shares of Eli Lilly saw a minor decline. The approval illustrates the fierce competition within the obesity treatment sector as pharmaceutical companies strive to provide safer, more user-friendly, and effective treatments for millions globally.

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