GLP-1R Agonist due diligence (Novo Nordisk stock analysis)

Tried to post this on value investing but got removed, possiblity due to multiple previous posts about Novo Nordisk. Wanted to post my analysis for critique: For context I have previously just held index funds (S&P 500 & FTSE 100) but with growing fears (believable IMO) of an AI/ Tech bubble and the fact that the S&P 500 is currently 34.43% weighted to Tech I wanted to look at diversifying away from that with some defensive stock picks. My professional background is healthcare so seems a reasonable place to start. Firstly I would say the safe bet is that GLP-1 agonists and similar drugs are going to be a mainstay of pharamacetutical sales over the next 10 years and probably further into the future. They have shown themselves already to be a silver bullet for weight loss & obesity which is a plague of the western word. Furthermore there is good evidence to suggest they are powerful at reducing obesity related diseases with hard endpoints (morbidity and mortality) like diabetes and heart disease etc. On top of this they do this with what seems to be an acceptably rare side effect profile (notably there are cases of severe pancreatitis which is life threatening). I'm not sure if many would disagree with this first point. Novo Nordisk and Eli Lilly as you probably know are the only two companies to have GLP-1 Receptor agonists on the market and both have other drugs in pipeline. Other key companies with drugs in pipeline include Roche, Amgen and Pfizer which aquired one with Metsera. The horizon includes the oral version of Novo's existing drug semaglutide which just got FDA approval and a new small molecule drug from Lilly; Orforglipron which should be noted for the fact that it will probably be cheaper to produce than Novo's large molecule oral semaglutide. Lilly also has a triple agonist (retatrutide) which hits two other key receptors with a differing affinity profile which seemed to be quite effective based on their dose escalation phase II trials with phase III trials ongoing. Novo has a dual and a triple agonist also in the pipeline at Phase II. So as alot of people have alluded to Novo's share price has plummeted from an all time high in the last year with the accepted narrative being that Lilly has eaten its lunch by being able to rapidly take market share through faster manufacturing with what seems to be a slighlty more effective drug (Tirzepatide / Mounjaro). I don't have a background in finance or stock analysis but I have tried to compare these GLP-1Ra related companies using key value investing ratios for the last financial year below. I have avoided using any forward looking metrics (like PEG or projected EPS) because in my inexperieced view that is just relying on someone elses prediction about what will happen and why would they know? I've just focused on whether the business is well run and has good fundamentals. |**Stock**|**Roche**|**Amgen**|**Pfizer**|**Eli Lilly**|**Novo Nordisk**| |:-|:-|:-|:-|:-|:-| |**Price in USD**|$422.11|$340.55|$25.66|$1,107.89|$57.11| |**Current Price before conversion**|336.40|340.55|$25.66|1,107.89|365.25| |**Market Cap ($)**|342.2B|184.4B|146.5B|1055.0B|253.6B| |**P/E**|28.68|26.37|14.91|54.04|15.6| |**EPS**|11.75|12.94|1.72|20.45|23.33| |**EV/EBITDA**|13.02|13.53|7.83|34.29|10.10| |**Debt / Equity**|1.05|5.67|0.67|1.79|0.60| |**ROIC**|18.54%|10.56%|7.04%|29.95%|42.81%| Not only does Novo have a much better P/E ratio compared to competitors it also has higher earnings per share, better value to earnings ratio, better debt to equity ratio. Finally the return on invested capital is significantly higher and has been high for years. Essentially this business is highly efficient at turning invested capital into returns. So this just means the business is well run and has good financials. But surely theres a risk that Eli Lilly will just dominate the market with better drugs? That is definetely a possibility, especially with the potentially cheaper Orforglipron, but I would argue the obesity market is so large and is likely to get even larger as developing countries become richer. So much so that there will be a large enough market for Novo to still sell plenty of their drugs even if they are number 2 behind Lilly, and hopefully derive growth and value over the long term. Essentially it doesn't need to be see as a 'winner takes all situation' with such a large market. The problem with Lilly is the current price. Just compare those same metrics with a whopping PE of 54.04. It otherwise seems like a reasonably well run company with good prospects pipeline wise. And yes there are other risks for Novo, the standard pharma risks of drugs not working as intended, or intolerable side effects, but this isn't a new class of drugs so hopefully those risks are minimised. On the plus side Novo does have other (smaller) facets to its business including insulin and rare disease medicines so this does slightly reduce the downside risk if they gut hammered in the GLP-1 Market. I will probably end up buying a bundle of 3 of these companies (including Lilly and maybe Roche) but weight it towards Novo. I'm not posting this all so you can agree with me, I'm hoping for (hopefully) insightful critiques. What am I not considering?