Novo Nordisk’s (NYSE:NVO) nearly 11% pre-market drop on Monday and subsequent 9% dip at market open, in the aftermath of disappointing topline results from its evoke/evoke+ Alzheimer’s trials, is more than a pipeline setback. It’s a stress test for healthcare ETFs that have quietly become GLP-1 momentum vehicles. With two years of outperformance powered by Novo’s Ozempic and Wegovy, and Eli Lilly‘s (NYSE:LLY) Mounjaro and Zepbound, many ETFs now live and die by the swings of just two companies: Novo and Eli Lilly.
Where ETF Exposure Is Heaviest
The Roundhill GLP-1 & Weight Loss ETF (NASDAQ:OZEM) sits squarely at the center of Monday's shock. The fund's top weights — Eli Lilly at 18.72% and Novo Nordisk at 13.23% — mean that more than one-third of the ETF is tied directly to the GLP-1 duopoly. OZEM has benefited enormously from the sector's runaway rally, but Novo's sudden decline shows the flip side: thematic funds concentrated in just a few dominant players can amplify volatility when one of them hits a speed bump. Still, given Lilly's broader revenue engines, OZEM may remain more resilient than its high concentration suggests.
The VanEck Pharmaceutical ETF (NASDAQ:PPH) is sensitive to Elli Lilly and Novo Nordisk, making the fund an accidental bet on the GLP-1 duopoly. GLP-1 names have been key return drivers in this ETF, and Monday’s selloff underlines how inextricably linked the ETF’s fate is to both Novo and Lilly.
iShares U.S. Pharmaceuticals ETF (NYSE:IHE): Lilly accounts for meaningful weight (27%) in the ETF, making the fund heavily concentrated in one stock. When Lilly stumbles, the impact ripples quickly. Not necessarily a bet on Novo, but this ETF highlights the problem of concentration risk.
Even broad sector funds, such as Health Care Select Sector SPDR Fund (NYSE:XLV), which are market-cap weighted, are not immune. Lilly’s rocketing to a trillion-dollar market cap has given the stock oversized influence.
Why Lilly-Dominant ETFs May Be Safer Than They Look
Yet here’s the kicker: ETFs heavy on Eli Lilly could end up in a position of strength.
Thanks to the extraordinary success of Mounjaro and Zepbound, which have generated $25 billion in the first nine months of 2025, Lilly became the first healthcare company in history to reach a $1 trillion valuation. But unlike Novo, Lilly is not a one-pillar company.
Its broader portfolio is firing on all cylinders:
- Verzenio (oncology) and Taltz (immunology) continue robust growth.
- Newer launches — Omvoh, Ebglyss, Jaypirca, Kisunla — meaningfully adding to revenues.
- A spate of M&A activity focusing on ophthalmology, oncology, gene therapy, and cardiovascular disease is diversifying the future pipeline.
- Also, late-stage pipeline candidates like orforglipron -ahead of oral GLP-1 and the tri-agonist retatrutide would indicate that Lilly is extending their lead in next-generation obesity treatments.
For OZEM, PPH, IHE, and XLV — among other ETFs — this multi-engine growth story means Lilly-heavy exposure remains relatively secure, even if the GLP-1 trade experiences short-term hiccups.
Meanwhile, Novo has to grapple with a more complex storyline:
- Narrowed GLP-1 growth expectations.
- Trial failures outside of its core obesity franchise.
- Trump’s push to lower “fat-loss drug” prices.
- an FDA rejection of its multi-dose Wegovy device
- Intensifying competition from Lilly, Viking Therapeutics, and Pfizer’s $10 billion Metsera acquisition.
- Even as it works on oral Wegovy and next-generation combinations like CagriSema and amycretin, Novo’s expectations for revenue growth have moderated.
The Takeaway For ETF Holders
The GLP-1 boom has reshaped healthcare ETFs, supercharging returns but also amplifying risk. The stumble by Novo Nordisk does not in any way derail the obesity blockbuster trend, but it is a sharp reminder that concentration cuts both ways. For investors in pharma and healthcare ETFs, understanding who carries more Novo risk versus Lilly resilience may matter now more than ever.
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