Novo Nordisk's Wegovy Pill Shakes Up Rivalry With Eli Lilly, Puts Health Care ETFs In Focus

The approval of Novo Nordisk’s (NYSE:NVO)oral Wegovy is bringing new interest to health care and pharmaceutical ETFs that provide access to the growing GLP-1 market without requiring investors to choose one specific company.

• What should traders watch with XLV?

Broad funds like the Health Care Select Sector SPDR Fund (NYSE:XLV) and the Vanguard Health Care ETF (NYSE:VHT) offer diversified exposure to major drugmakers, such as Novo Nordisk and Eli Lilly And Co (NYSE:LLY), as well as insurers and health care service providers that might benefit from better obesity outcomes over time.

For investors looking for more focused exposure, pharmaceutical-focused ETFs such as the VanEck Pharmaceuticals ETF (NASDAQ:PPH) and biotech-heavy funds like the iShares Biotechnology ETF (NASDAQ:IBB) and the State Street SPDR S&P Biotech ETF (NYSE:XBI) provide different levels of sensitivity to drug development milestones.

These funds include not only established leaders but also smaller biotech firms that are racing to develop next-generation obesity treatments, increasing both potential gains and volatility.

Novo’s Pill Approval Marks A Market Turning Point

The U.S. Food and Drug Administration’s approval of Novo Nordisk’s oral Wegovy is the first time a GLP-1 pill has been approved for chronic weight management.

This gives the Danish drugmaker an early advantage in a market expected to exceed $150 billion annually by the early 2030s. The pill contains 25 milligrams of semaglutide, the same active ingredient as the injectable Wegovy and Ozempic, and aims to increase access by providing a non-injectable option.

In a 64-week late-stage trial, patients taking the pill lost an average of 16.6% of their body weight, while those receiving a placebo lost only 2.7%. The announcement triggered a sharp rise in Novo shares, which increased by more than 7% in premarket trading, providing some relief after a year of declining injectable sales and growing competition.

Lilly and Others Close Behind

Eli Lilly is close behind, with its oral GLP-1 candidate, orforglipron, showing promising weight-loss results in late-stage trials. U.S. regulators are reportedly reviewing the drug on an accelerated schedule, making approval possible as early as March. Meanwhile, companies such as AstraZeneca, Roche and several smaller biotech firms are advancing their own oral obesity candidates through clinical development.

As the industry shifts from injections to pills, which are easier to produce, distribute and use, the obesity drug market seems ready for its next phase of growth. For ETF investors, diversified exposure may be the most dependable way to remain competitive without relying on one stock to succeed.

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Photo: Production of Wegovy pills 25 mg. courtesy Novo Nordisk