Novo Nordisk’s rally on approval of an oral Wegovy is strategically important, but it does not automatically guarantee a sustained turnaround.

Why the oral approval matters

An effective oral GLP-1 materially expands the addressable market. Many patients avoid injectables due to inconvenience or needle aversion, particularly in primary care and early-stage obesity treatment. From a competitive standpoint, this is Novo Nordisk’s first credible answer to Eli Lilly’s strong pipeline momentum and helps rebalance the narrative that NVO is structurally losing ground.

Why NVO underperformed so sharply

NVO’s 38% decline this year reflects a mix of factors rather than a collapse in the obesity thesis. Concerns centred on manufacturing capacity, slower-than-expected supply expansion, pipeline disappointment versus Lilly, and valuation compression as capital rotated into perceived category leaders. Importantly, demand for GLP-1 therapies never weakened. Execution risk and relative momentum drove the divergence.

Does this mark a turning point?

Potentially, yes, but with conditions. The oral launch improves Novo’s competitive positioning, but the market will focus on three follow-through factors:

Real-world efficacy and adherence versus injectables.

Speed of commercial uptake and reimbursement coverage.

Evidence that Novo can close the innovation and scale gap with Lilly, not merely defend share.

2026 outlook

After such a sharp derating, expectations for NVO are now materially lower than for LLY. That asymmetry matters. If execution stabilises and oral Wegovy gains traction, 2026 could see multiple expansion alongside earnings recovery. This creates a credible path to a re-rating rather than a speculative rebound.

Relative positioning versus LLY

LLY remains the higher-quality momentum compounder with superior pipeline breadth. NVO, however, now offers a classic recovery setup: strong fundamentals, repaired narrative, and lower expectations. Returns may be more volatile, but upside risk is no longer trivial.

Conclusion

This approval does not end the competitive gap overnight, but it meaningfully improves Novo Nordisk’s strategic posture. 2026 could mark a recovery phase rather than a breakout-led dominance shift. For investors, NVO now looks like a turnaround candidate, while LLY remains the structural leader.