Stock prices for the pharmaceutical giant Novo Nordisk have fallen dramatically following a new finding that the active ingredient in its obesity management drug, semaglutide, is less effective than Eli Lilly’s competitor product.

A first-of-its-kind study was published Monday in JAMA Internal Medicine comparing semaglutide, the active ingredient in Novo’s Ozempic and Wegovy, to tirzepatide, the active ingredient in Eli Lilly’s Mounjaro and Zepbound. Researchers found that patients on tirzepatide lost substantially more weight than those on semaglutide, sending ripples through the market.

Between 8 p.m. Monday and the market open Tuesday, Novo share prices had fallen by nearly 3 points, about 2%, and they further fell by more than 2% by noon. By contrast, Lilly prices increased modestly by nearly 2% from Monday evening to noon Tuesday.

Both semaglutide and tirzepatide belong to the same new drug class of GLP-1s, each mimicking a natural hormone that curbs appetite and creates a feeling of fullness. Tirzepatide, however, also mirrors the hormone GIP, which both decreases appetite and may improve how the body processes sugar and fat.

The dosage of the active ingredient makes the key difference between whether each drug is approved for treating Type 2 diabetes or obesity.

Zepbound, Lilly’s branding of tirzepatide for obesity management, was approved by the Food and Drug Administration in late 2023, making head-to-head comparison between the two drugs challenging.

In the study published in JAMA, researchers examined the health records of more than 41,000 patients, nearly 32,000 of whom were on semaglutide either for obesity management or Type 2 diabetes treatment.

On average, semaglutide patients lost 3.6% of their body weight after three months, 5.8% after six months, and 8.3% after one year.

By comparison, tirzepatide patients lost 5.9% in three months, 10.1% after six months, and 15.3% after one year.

Stock prices for Novo soared last year, rising by 53% by the end of 2023. This is mostly thanks to the growth in popularity of Wegovy for weight loss, and several key studies showing its benefits for cardiovascular health.

Novo’s portfolio also benefited immensely when the FDA approved Wegovy specifically for cardiovascular disease treatment following successful clinical trials.

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Lilly’s shares also skyrocketed since the FDA approved Zepbound last year, growing by 55% in the first half of 2024. With shares hovering around $900 each, it is possible that prices will top $1,000 per share by year’s end.

Both drug companies are competing for breakthroughs in oral routes for their medication compared to the current once-weekly injection.