The divide between Eli Lilly and Novo Nordisk is widening after their latest earnings

Novo Nordisk's stock tumbled as Wall Street remained uncertain about the company's future following a better-than-expected quarterly report and guidance increase. Analysts pointed out that the boost was due to rebate adjustments and temporary factors, with obesity drug sales remaining consistent with expectations and oral Wegovy slightly falling short of forecasts.

The Danish drugmaker also announced disappointing results for its next-generation weight-loss drug, CagriSema, fueling concerns about its long-term prospects. Citi analysts labeled the update as "nothing to inspire," while Jefferies stated that the guidance increase offered little room for consensus sales estimates to climb higher.

Novo Nordisk revised its full-year guidance, projecting adjusted sales and operating profit to either be flat or slightly decline at current exchange rates, a marked improvement from the previous expectations of a 4% to 12% decline. The Copenhagen-listed shares experienced a sharp drop of up to 5% in early trading, before recovering somewhat.

Novo's ADRs saw a 6% decrease in after-hours trading, following the early release of the quarterly report. The company is striving to regain investor trust in its pipeline and execution capabilities, particularly in the competitive U.S. market, as Eli Lilly's rival drugs Zepbound and Mounjaro have steadily gained market share since their launch.

Despite the recent setbacks, CEO Mike Doustdar highlighted the continued rapid adoption of Wegovy in the U.S., with over 5 million prescriptions since its introduction, and highlighted the rollout of Wegovy high dose in other markets as a potential growth driver for Novo Nordisk in 2026.