GLP-1: The Second Round
Second-order beneficiaries and the now-cheap market leader after the hype cooled
The first GLP-1 boom crowned Eli Lilly and Novo Nordisk, but the second round shifts the opportunity set. Novo Nordisk has fallen about 56 percent from its high in 2026 after a missed CagriSema trial and a profit warning, making it a potential re-rating candidate. At the same time, device makers and next-generation biotech challengers benefit from the expanding metabolic-care market.
Mechanism
As the GLP-1 market shifts from injectable pioneers toward oral pills and broader metabolic care, winners emerge beyond the pure drug makers. Continuous glucose monitor makers benefit as more treated patients want to track their metabolism. A de-rated market leader can recover if pessimism is overdone, while a biotech challenger gets re-rated on trial success.
Catalysts
Novo Nordisk became the first to launch an oral Wegovy obesity pill in the US in early 2026, followed by Eli Lillys orflorglipron in April 2026. Vikings Phase 2 VENTURE data showed up to about 12 percent weight loss with the oral form, and its Phase 3 VANQUISH program is underway. DexCom highlighted its over-the-counter Stelo platform and guided to roughly 11 to 13 percent revenue growth for 2026.
Risks
US pricing pressure under the Most Favoured Nation framework and patent expiry across several markets weigh on incumbent margins. Novos pessimism could prove justified if Eli Lilly keeps taking share. Biotech challengers carry binary trial and approval risk, and device makers could suffer if GLP-1 pills reduce the need for glucose monitoring.
Time horizon
The thesis plays out over 12 to 36 months, driven by the oral pill ramp, Phase 3 readouts, and the multi-year expansion of metabolic care. A re-rating of Novo depends on stabilized guidance and pipeline progress.