The weight-loss market is heating up as a number of companies are looking for a way to upend the dominance of market leaders Novo Nordisk (NVO) and Eli Lilly (LLY) by introducing GLP-1 pills.

New data revealed last week from Roche (RHHBY), Novo, and a smaller biotech prove that an oral option could be as effective as injectables, but Wall Street is waiting to see whether or not patients will prefer a daily pill to a weekly or monthly injectable.

Roche provided early Phase 1 clinical trial data last week that showed its pill provided 6.1% weight loss over four weeks. The sample size of the study was small, just 12 patients, which is typical of early-stage trials.

This is why experts remain vigilant and await later-stage trial data to prove market potential.

Roche's data is about the same as others already in the oral GLP-1 race, including Pfizer (PFE), Novo, and Lilly. Pfizer recently revealed Phase 2 clinical trial data for its once daily danuglipron showing up to 11.7% weight loss at 32 weeks.

The frontrunner is Lilly's orforglipron, which showed up to 14.7% weight loss in Phase 2 trials at 36 weeks. It has set the bar for other contenders and gives investors confidence in the current injectable market leader's ability to capture market share.

"As we consider major innovations in the obesity market, we continue to see much of this coming from LLY and Novo with many newer potential entrants to the space offering limited differentiation from programs already being advanced by the market leaders," JPMorgan analyst Chris Schott wrote in a note to clients last week.

New data

One key way that companies can differentiate themselves is by providing fewer unpleasant side effects.

Despite the positive news of its weight loss results, Roche's stock took a hit last week — down 5.4% in the week — after concerns about the pill's side effects were revealed.

But all GLP-1s, including the current batch of injectables, have side effects like nausea, vomiting, and dizziness. The concern that began when injectables were entering the market is spilling over into trials for pills.

"It is important to keep in mind that in 28-day trials, in order to maximize time on treatment at the full dose level, doses are titrated much more quickly than they would be in real-world use and in longer-term Phase 2 and Phase 3 trials, so we expect tolerability profiles to improve," said to BMO Capital Markets' analyst Etzer Darout in a note last week to clients.

But the higher prevalence of negative side effects using lower dosages in Roche's trial appears to be a reason for greater concern. Especially since it trails other contenders, like Lilly's orforglipron, which is now in Phase 3.