Shares of Novo Nordisk A/S (NVO) plummeted 8.08% in pre-market trading on Thursday, following a significant downgrade from BMO Capital and news of a breakthrough from competitor Eli Lilly in the weight loss medication market. The Danish pharmaceutical giant, known for its diabetes and obesity treatments, faces mounting pressure as investors reassess its market position in light of these developments.

BMO Capital's decision to downgrade Novo Nordisk from Outperform to Market Perform sent shockwaves through the market. The analysts slashed their price target dramatically from $105 to $64, citing concerns about the company's future growth prospects in the highly competitive obesity and diabetes treatment sectors. This stark reduction in outlook has prompted investors to reevaluate their positions in the stock.

Adding to Novo Nordisk's woes, Eli Lilly announced promising results from a late-stage trial of its experimental pill, orforglipron. The drug achieved an average weight loss of 7.9% and improved blood sugar levels in overweight patients with type 2 diabetes. This development poses a significant threat to Novo Nordisk's market dominance, as Lilly's oral medication could potentially compete with Novo's injectable treatments like Ozempic and Wegovy. The news of Eli Lilly's breakthrough sent its own shares soaring nearly 13% in pre-market trading, further highlighting the shift in investor sentiment within the pharmaceutical sector.