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The Metabolic Split: Why Eli Lilly Soars as Novo Stumbles
By Jeffrey Neal Johnson. Publication Date: 2/5/2026.
Article Highlights
- Eli Lilly projects robust revenue growth, driven by aggressive investments in new manufacturing facilities now fully operational.
- The pipeline features next-generation treatments, including a triple agonist and an oral pill that promise to set new industry standards for efficacy.
- Releasing single-dose vials allows the company to bypass supply bottlenecks and expand access to weight loss medicines for a broader patient base.
The first week of February 2026 will be remembered as the day the pharmaceutical sector's most famous partnership officially dissolved. For years, Eli Lilly and Company (NYSE: LLY) and Novo Nordisk A/S (NYSE: NVO) moved in near lockstep, their stock charts almost identical as they raced to supply the world with weight-loss medicines. That era is over.
The market delivered a swift verdict following the companies' financial updates. Eli Lilly shares rose more than 7%, propelling the Indianapolis-based giant back above the $1 trillion market capitalization threshold. Conversely, Novo Nordisk stock tumbled nearly 6%, erasing billions in shareholder value.
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The catalyst wasn't just a single earnings beat; it was a fundamental decoupling of future expectations. Lilly projects growth for 2026, while Novo Nordisk warned investors of a sales decline. The divergence underscores a new reality: manufacturing capacity and pipeline breadth—not just first-mover advantage—will determine the winner.
The Financial Divide: Boom vs. Bust
The quarterly reports show two companies moving at different speeds. Eli Lilly delivered a dominant performance in the fourth quarter of 2025, reporting $19.3 billion in revenue, a 43% year-over-year increase. Profits were equally strong, with earnings per share (EPS) of $7.54, topping Wall Street consensus of $7.48.
But the rally was driven by the outlook. Lilly issued guidance for 2026 revenue of $80 billion to $83 billion, implying roughly 25% growth — a striking figure for a company of its size.
By contrast, Novo Nordisk's fourth-quarter update served as a sobering check. While full-year 2025 sales were solid at DKK 309 billion (about $44 billion), the company's forward guidance alarmed investors: Novo now projects a 5% to 13% decline in sales for 2026. Management pointed to a set of specific headwinds that will weigh on the Danish drugmaker's performance, in stark contrast to Lilly's aggressive expansion.
The Volume Defense Strategy
Both companies face a common headwind: U.S. policy initiatives often labeled "TrumpRx," which include Most Favored Nation (MFN) pricing clauses that effectively cap reimbursements for government-insured patients and press net prices lower.
Eli Lilly has countered with a volume-driven defense. In the fourth quarter, Lilly's U.S. volume rose about 50%, and that jump in units sold largely offset a roughly 7% decline in realized price.
Two strategic pillars are driving this volume expansion:
- Greenfield manufacturing: Since 2020 Lilly has committed more than $50 billion to building new factories from the ground up. Large sites in Wisconsin and North Carolina are now operational, relieving the supply constraints that previously limited growth.
- The vial workaround: Lilly's launch of Zepbound in single-dose vials has shifted prescribing patterns. Vials now account for nearly 50% of new prescriptions. By selling vials directly to patients, Lilly can sidestep parts of the Pharmacy Benefit Manager (PBM) system and undercut compounding pharmacies on price.
Novo Nordisk faces a tougher arithmetic problem. Although it acquired three fill-finish sites from Catalent to boost production, the ramp-up has lagged demand. Without the capacity to meaningfully increase pen sales in 2026, Novo is unlikely to fully offset mandated price cuts, contributing to the forecasted revenue contraction.
The Pipeline Advantage
Looking beyond the 2026 transition year, investors see another reason to favor Lilly: a higher potential efficacy ceiling.
Lilly's pipeline is led by retatrutide, nicknamed "Triple G" because it targets three receptors (GLP‑1, GIP and glucagon). Phase 3 data showed retatrutide produced roughly 29% average body-weight loss over 68 weeks — results that approach those achieved with bariatric surgery and have reset expectations for the class.
Novo Nordisk's response, CagriSema, delivered about 22.7% weight loss in its Phase 3 trials. That outperforms the current market leader, Wegovy, but trails Lilly's retatrutide benchmarks.
The race is also shifting to oral medications, the key to mass-market adoption. Novo Nordisk recently launched its Wegovy Pill (oral semaglutide 25 mg) in the U.S., seeing strong initial uptake. Lilly's oral candidate, orforglipron, offers a manufacturing advantage: as a small-molecule drug rather than a complex peptide, it should be cheaper and easier to produce at scale, potentially giving Lilly a long-term margin edge in the high-volume oral market.
Capital Allocation Strategies: Buybacks vs. Bulldozers
How companies deploy capital reveals their priorities. Novo Nordisk announced a share-repurchase program of up to DKK 15 billion (approximately $2.15 billion). While buybacks return cash to shareholders, this move reads as defensive — a way to support Novo Nordisk's stock price during a period of slowing growth.
Eli Lilly is decidedly on offense. The company continues to invest heavily in physical infrastructure, including a newly announced $3.5 billion facility in Pennsylvania. Rather than repurchasing shares, Lilly is buying capacity — widening its supply moat so it can meet the next wave of demand.
A New Era for Metabolic Investors
The days of buying the entire metabolic sector and expecting uniform gains are over. Early February's market action is a wake-up call: execution now separates winners from also-rans.
Eli Lilly offers a clear 2026 narrative: double-digit growth driven by manufacturing scale that can absorb regulatory price pressure. The company has moved from a supply-constrained posture to a volume-driven growth engine.
Novo Nordisk remains a formidable and highly profitable company, but it faces a gap year. Between restructuring, supply catch-up and pricing headwinds, the Danish giant will need time to regain momentum. For investors seeking immediate exposure to growth in the metabolic market, the momentum has shifted decisively to Indianapolis and Eli Lilly.
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