Every time Novo urges investors to look ahead, Eli Lilly gives them another reason to look back at its widening lead over the Danish drugmaker.

Novo this week laid out an ambitious strategy to reignite growth beyond its top-selling Wegovy and Ozempic injections, which face patent expirations in key markets in the early 2030s. At its Capital Markets Day on Monday, the company promised a pipeline of potential blockbuster products, including drugs that would diversify from its core area of obesity and diabetes.

But Wall Street so far isn't convinced by Novo's road map. Investors pummeled the drugmaker's stock, underwhelmed by growth targets that matched industry averages rather than outpacing them. They were also skeptical of the lack of clarity around a near-term turnaround plan.

At the same time, Lilly continues to chip away at its rival's market share — including in the burgeoning obesity pill space.

Novo hopes to keep its early lead in the oral weight loss market after the successful launch of the Wegovy pill, months ahead of Lilly's rival pill, Foundayo. Novo CEO Mike Doustdar told CNBC on Tuesday that early adoption suggests patients may have been waiting for an alternative to injections.

"If that continues to the extent that we have seen, then yes, mathematically, by the end of the decade, there is going to be a larger portion on the pill than injectable," he said. But Lilly is hot on its heels, backed by its commercial firepower.

an exclusive interview with CNBC on Monday, Lilly CEO Dave Ricks said the drugmaker's new obesity pill, Foundayo, is slowly gaining ground in the U.S.

One-third of new GLP-1 pill patients are taking Lilly's drug, and its share of that oral market is growing "week by week," Ricks told CNBC in Houston, Texas.

Lilly is also claiming an early lead in the newly established Medicare market for obesity drugs, after the federal program started covering those treatments in July. Ricks said 700,000 seniors have started GLP-1s in Medicare following the start of coverage, and 70% of those patients are on Lilly's drugs.

He added that Medicare patients have shown a particular preference for Lilly's obesity injection Zepbound, which has helped the company become the dominant player in the broader market. Lilly said in August that it held about a 61% share in the U.S. GLP-1 space in the second quarter, while Novo held roughly 39%.

While investors appeared to want more detail on Novo's plans for post-Wegovy and Ozempic growth at Monday's investor event, the drugmaker is betting that there could be more than one successor to the mega-blockbuster franchise.

For Novo, the challenge is not solely replacing revenue from Wegovy and Ozempic when they lose exclusivity and face more generic competition. It is convincing investors that the company can regain momentum in a GLP-1 market it helped establish years before Lilly came into the picture, even as its rival continues to build its lead.

Lilly likely to keep its upper hand Even as Novo works to turn itself around after two bruising years marked by multiple setbacks, analysts say Lilly has several advantages that could help it maintain its spot at the top of the obesity drug market.

"Lilly is in the leadership position, and we think that they will remain in this strong leadership position, given their substantial commercial advantage, their global initiative to globalize their products further, and then their advanced pipeline of novel candidates as well," Leerink Partners analyst David Risinger said in an interview.

Risinger expects Foundayo's share of the oral GLP-1 market to continue growing, pointing to Lilly's "tremendous commercial firepower" and greater spending capacity to promote the drug. But Risinger expects Foundayo to eventually dominate the pill market globally, in part because it should be less costly to manufacture at scale than the Wegovy pill.

Foundayo is a small-molecule drug, which can be manufactured differently and more easily at scale than peptide drugs such as Novo's Wegovy pill and existing injectable GLP-1s. While Foundayo leads to less weight loss on average than the Wegovy pill, it doesn't carry any food and water restrictions, which could be a selling point for some patients.

Novo executives this week did not directly answer questions about whether Foundayo is easier to manufacture and scale. Novo is investing billions in manufacturing facilities and, executives said this week, the company aims to be able to increase the number of patients on its GLP-1 drugs tenfold by 2030. Executives have repeatedly said supply is not an issue and that Novo will not face the same shortages it did with injectable versions in the earlier days of Ozempic and Wegovy.

For Lilly, Zepbound's higher efficacy than the original doses of Wegovy has also been key to securing its market share lead over Novo in the injectable space. Novo has sought to narrow that efficacy gap with a higher-dose version of Wegovy launched this year, which leads to roughly similar weight loss as Zepbound. But Lilly is not standing still. The company has a pipeline of next-generation obesity drugs that could extend its lead beyond Zepbound and Foundayo, Risinger said. That includes retatrutide, a triple-agonist that targets three gut hormones and has produced greater weight loss than existing obesity drugs in clinical trials. Lilly plans to seek approval for the drug in the first quarter of 2027.

Lilly is also developing a weekly injection that targets the amylin receptor, a pathway involved in appetite and satiety that differs from those targeted by existing treatments. Risinger said the drug has "much greater potential than the Street currently realizes," particularly because a large population of patients does not tolerate or respond adequately to GLP-1 drugs. "We're quite enthusiastic about the company's pipeline for follow-on agents beyond Zepbound and Foundayo," Risinger said.

While investors have been laser-focused on the headline weight loss number of Novo and Lilly's next-generation drugs, Novo sees a fragmented market ahead.

Chief Scientific Officer Martin Holst Lange told CNBC this week that the breadth of Novo's future pipeline would give physicians and patients more options and increase uptake. The company is studying the effect of new drugs on factors like tolerability, muscle preservation, their effect on obesity-linked conditions, convenience and more.

Chief Scientific Officer Martin Holst Lange told CNBC this week that the breadth of Novo's future pipeline would give physicians and patients more options and increase uptake. The company is studying the effect of new drugs on factors like tolerability, muscle preservation, their effect on obesity-linked conditions, convenience and more. "We can't do that with one single drug," Lange said. Novo bets on its next generation For Novo, the answer to Lilly's dominance is a sweeping bet on what comes next.

Novo is targeting the launch of more than five potential multi-blockbuster drugs by 2030 and more than 150 billion Danish kroner, or about $23 billion, in pipeline sales by 2035. It also plans to have at least five Phase 3 programs in obesity and diabetes and another five across other therapeutic areas, as it tries to diversify its pipeline.

Novo is targeting the launch of more than five potential multi-blockbuster drugs by 2030 and more than 150 billion Danish kroner, or about $23 billion, in pipeline sales by 2035. It also plans to have at least five Phase 3 programs in obesity and diabetes and another five across other therapeutic areas, as it tries to diversify its pipeline.

The scale of that plan highlights the problem Novo is trying to solve. It has patent protection on semaglutide, the active ingredient in Wegovy and Ozempic, until 2032. Those two drugs account for roughly two-thirds of Novo's sales, racking up combined sales of $31 billion in 2025.

Novo needs to convince investors that its pipeline of new drugs can fill the hole when generic competitors enter the market. So far, it hasn't been able to shake off a multiyear stock selloff after a series of setbacks.

The new lineup the company is banking on includes CagriSema, Novo's combination of semaglutide and a drug called cagrilintide that targets amylin, which is expected to launch early next year. That will be followed by standalone cagrilintide and a higher-dose version of CagriSema in 2028, among other new obesity products. Wall Street isn't particularly excited about CagriSema, whose previous late-stage clinical trials disappointed investors because the drug showed weight loss efficacy below expectations.

Novo, however, maintains CagriSema is effective and differentiated enough to be commercially viable. Lange told CNBC individualized doses may be the way forward for the company's next big bet and highlighted new late-stage data released this week. It showed CagriSema produced greater weight loss than tirzepatide — the active ingredient in Zepbound and Lilly's Mounjaro — in a head-to-head trial among people with Type 2 diabetes. But those results came with caveats: The study used lower doses of the two drugs, and tirzepatide previously outperformed CagriSema in a separate head-to-head Phase 3 trial using higher doses of both treatments.

Meanwhile, Novo is still betting on the growth of the obesity pill market.

Novo believes market share isn't the only measure of success investors should look at going forward. The sheer volume matters too, Doustdar told CNBC, highlighting that the obesity market can still grow significantly.

Novo plans to scale manufacturing capacity enough to serve 15 million people taking oral obesity treatments by 2030, and has said pills could ultimately account for as much as half of the global obesity drug market. The company says its Wegovy pill has already reached 7 million U.S. prescriptions, with 90% of those sales coming through cash-pay channels. The problem is that investors appear to be demanding more than a promising pipeline.

Analysts on Monday pressed Novo executives on their pricing assumptions, questioning whether the company's next pipeline of drugs can sustain premium price points once Wegovy and Ozempic lose exclusivity.

Novo's 2026 to 2030 revenue outlook also targets growth in line with its pharmaceutical peers, rather than a return to the outsized growth from when Wegovy and Ozempic first boomed.

That leaves Novo with a difficult balancing act. It has to defend its existing obesity franchise against Lilly while simultaneously investing in the drugs that are supposed to replace it.

Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.