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 10% 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.
Lilly expects to launch its orforglipron pill in the U.S. in the second quarter, and in most international markets in 2027, Ken Custer, the company’s head of cardiometabolic health, said on a call to discuss its results and outlook.
“We’re very encouraged by what we’re seeing with oral Wegovy as it validates our belief that there’s a substantial number of people with overweight and obesity who’ve been sitting on the sidelines waiting for an oral option,” Custer said.
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.
“Price is expected to be a drag on (percentage) growth in the low- to mid-teens,” said Lilly Chief Financial Officer Lucas Montarce on the call.
“Three factors will impact U.S. price: The government access agreement for obesity medicines, updated direct-to-patients pricing, and lower Medicaid prices for later-lifecycle medicines,” Montarce said.
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 and Leah Douglas in Washington; Editing by Anil D’Silva and Bill Berkrot)
Comments