Novo Nordisk’s Akero Therapeutics Buy Targets Eli Lilly’s Lead
Novo Nordisk A/S (NYSE: NVO) recently announced plans to acquire Akero Therapeutics. The deal, which is valued at around $4.7 billion, is scheduled to close early in 2026. After initially moving higher after the news, NVO stock has drifted lower, likely due to the renewed uncertainty surrounding tariff policy affecting the entire market.
This is the latest move by Novo Nordisk to compete with Eli Lilly and Co. (NYSE: LLY) in the multi-faceted weight loss and obesity market. Earlier this year, Novo announced a partnership with Septerna Inc. (NASDAQ: SEPN) to develop novel drug treatments for obesity and type 2 diabetes.
EFX Could Position Novo Ahead of Eli Lilly in NASH Treatments
Both deals highlight the company’s long-term strategy to move beyond managing obesity to treating the underlying causes. Akero’s efruxifermin (EFX) drug candidate is in Phase 3 trials. If approved, it has the potential to be a best-in-class treatment for metabolic dysfunction-associated steatohepatitis (MASH). The drug is currently being tested on patients with moderate to advanced liver fibrosis (F2-F3) and patients with cirrhosis (F4).
Approximately 40% of MASH patients also have Type 2 diabetes. Over 80% of MASH patients are overweight or living with obesity. Treating the underlying causes of obesity (i.e., metabolic health) has been a focus of both Eli Lilly and Novo Nordisk. The acquisition of Akero will help the company capture adjacent diseases tied to obesity,
Analysts estimate that the MASH market could be valued between $20 billion and $40 billion once effective therapies are in the market. EFX has made it through Phase 2b trials with strong safety and efficacy signals.
This is no small accomplishment because Novo is succeeding where other companies have failed. Investors may recall that in August, Novo’s Wegovy was the first GLP-1 drug approved for the treatment of MASH. This new deal can put Novo Nordisk in a position to leapfrog Lilly in the NASH pipeline space, since Lilly’s candidate is in an earlier stage of development.
Oral Wegovy Launch Set to Broaden Access in 2026
Moving beyond the obesity market may be a key to the company’s long-term success. However, in the short term, the market for GLP-1 drugs continues to expand, which is expected to reach $150 billion in 2034. That’s 10x growth from the $15 billion market it was in 2024.
Earlier this year, Novo Nordisk was the first company to have an oral GLP-1 drug approved by the U.S. Food & Drug Administration for obesity. The company expects to perform a limited rollout of the drug in the United States in early 2026. The broader launch will come later in the year as manufacturing capacity comes online.
It’s too early to tell if oral GLP-1 drugs will be as effective for weight loss as the injectable drugs. However, patients have stated a preference for the oral version, which is likely cheaper to produce, making these drugs more accessible to a broader market.
Analysts See Long-Term Upside Despite 2025 Pullback
Analysts have been mixed on NVO stock recently, suggesting investors may have to wait on the company’s early November earnings report to clarify the short-term direction.
However, the consensus price target of $76 still suggests a 34% upside from the stock’s current price as of Oct. 14. NVO stock is trading at around 15x earnings, but analysts are forecasting earnings growth of around 21%, suggesting the stock is undervalued in the broader market and among medical stocks.
It's also important to note that, although institutions don’t heavily own NVO stock, institutional buying has outpaced selling in the last two quarters. NVO stock is still about 14% above its 52-week low and is trading right at its 50-day simple moving average (SMA), which has served as both a level of support and resistance in the past year.
That said, NVO stock hasn’t recovered from the steep sell-off in July. Some of that was due to the company's announcement that the oral version of Wegovy would be delayed into 2026, but much of it was due to valuation concerns after the stock hit a record high in June.
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