Novo Nordisk sues Eli Lilly over weight loss drug claims as Cramer urges market focus

Novo Nordisk A/S initiated legal proceedings against rival pharmaceutical manufacturer Eli Lilly and Company on Tuesday, alleging that the latter’s advertising campaigns contained misleading claims regarding the superior efficacy of its weight loss drugs. Novo Nordisk contends that Eli Lilly relied on outdated clinical trials and inaccurate dose information to inflate performance metrics relative to Novo Nordisk’s products.

Eli Lilly has rejected these allegations, defending the robustness of its trial processes and committing to a vigorous legal defence against the lawsuit. The dispute has drawn immediate attention from financial media, with CNBC host Jim Cramer publicly urging Novo Nordisk to prioritise market competition over litigation. Cramer, a long-time supporter of Eli Lilly, questioned the strategic focus of the Danish firm, stating, "Why don't you try to win Novo Nordisk instead of going to court?"

Cramer praised Eli Lilly’s management, specifically highlighting chief executive David Ricks, and described the company’s recent achievements as "incredible things." While acknowledging that Novo Nordisk’s current leadership was not responsible for past strategic missteps, Cramer suggested that Eli Lilly’s share price decline on the day of the news might present an investment opportunity for those looking at the broader weight loss drug sector.

Market data underscores a significant divergence in recent share performance between the two competitors. Eli Lilly’s shares have risen 48.5% over the past year and 10.7% year-to-date, whereas Novo Nordisk’s shares have fallen 31% over the past year and 6.9% year-to-date. This performance gap is reflected in institutional sentiment, with investment bank coverage and hedge fund holdings showing greater favour for Eli Lilly.

Institutional positioning data for the first quarter of 2026 indicates that 132 out of 1,022 hedge funds held stakes in Eli Lilly, compared to just 55 funds holding stakes in Novo Nordisk. Fisher Asset Management, for instance, disclosed a $4.4 billion stake in Eli Lilly, while its stake in Novo Nordisk was valued at $332 million. Investment bank targets also reflect this split, with Goldman Sachs slashing Novo Nordisk’s share price target to DKK260 in March due to weaker estimates for its CagriSema drug, while Citi raised its target to $1,600, maintaining a Buy rating.