While Big Pharma Stalls, One Small-Cap Breaks Out

By Patrick Davis

Mar 26, 2025

3 min read

The market’s focus is narrow, but step outside the spotlight, and you’ll find where real momentum is building.

S&P 500 down this year

In a year where the S&P 500 has slipped -1.78% and biotech giants like Novo Nordisk (NYSE: NVO) are under pressure, Medicus Pharma (NASDAQ: MDCX) is breaking away from the pack. The stock has surged 32% year-to-date, outperforming Eli Lilly’s (NYSE: LLY) respectable 9.55% gain and leaving Novo’s -15.9% slide far behind. But it’s not chasing blockbuster weight loss drugs — it’s targeting a radically different frontier: non-invasive skin cancer treatment.

The market's attention remains fixated on obesity drugs, but that trade is looking tired. Novo’s drop reflects valuation fatigue. Lilly’s gains are narrowing. Small-cap biotech moves fast when the story clicks.

Medicus Pharma Ltd (NASDAQ: MDCX) is developing the SkinJect D-MNA patch for basal cell carcinoma (BCC)1, a proprietary microneedle array that is a non-invasive, painless, and cost-effective alternative to Mohs surgery, the current standard of care. A small, thumb-sized microneedle patch is applied to the skin over the BCC lesion. The patch is painless and easy to administer in a doctor’s office and can be applied during just three weekly 30-minute visits over 2 weeks. This has the potential to provide a simple and affordable solution to BCC patients seeking better treatment options. With over 5 million BCC cases diagnosed annually in the U.S., Medicus Pharma targets a $2 billion share of the $15 billion North American skin cancer market. Its SkinJect patch has projected development costs of $75–$100 million, far below the $648 million industry average2. Priced at around $1,000, it offers a cost-effective alternative to Mohs surgery ($1,800–$2,500)3.

Novo Nordisk (NYSE: NVO) just struck a big deal with a Chinese drugmaker, The United Laboratories International Holdings Limited, to license a new weight-loss and diabetes drug, UBT2514. The deal could be worth up to $2 billion, with $200 million paid upfront and the rest tied to performance milestones. Novo will also pay royalties if the drug sells well outside of China. United Laboratories retains rights in China, Hong Kong, Macau, and Taiwan, while Novo Nordisk holds exclusive rights elsewhere. Novo Nordisk's new weight-loss drug CagriSema showed 15.7% weight loss in patients with Type 2 diabetes in its most recent trial5. While effective, the results came in below some analyst expectations, contributing to a negative market reaction.

Eli Lilly (NYSE: LLY) is set to release key results this year from late-stage trials of its experimental weight-loss pill, orforglipron6. These results are highly anticipated, as the once-daily pill could offer a needle-free option for treating obesity and diabetes. If successful, it may expand access for patients globally and ease supply issues affecting injectable treatments. The pill could also strengthen Eli Lilly’s lead in the fast-growing weight-loss drug market as competitors rush to catch up. Meanwhile, Lilly has recently expanded its cancer drug pipeline by acquiring an experimental PI3K inhibitor from Scorpion Therapeutics7. This drug, STX-678, targets PI3Ka mutations common in breast, gynecological, and head and neck cancers.

Both Novo and Lilly are now advancing next-generation GLP-1-based therapies, including Novo’s newly licensed UBT251 and Lilly’s injectable retatrutide. Early data from UBT251 show promising double-digit weight loss over a short treatment window, though Lilly’s drug has demonstrated even greater efficacy over longer trials. While Lilly continues to deepen its presence in both obesity and oncology, Novo remains more narrowly focused, with only a limited footprint beyond its core metabolic disease portfolio. The weight-loss space is increasingly defined by heavyweight competition — and fewer fresh angles.

In markets weighed down by macro fatigue and sector rotation, attention gravitates toward headline-grabbing giants, and small caps often get overlooked — until they don’t. While the biggest names fight to meet sky-high expectations, smaller players can deliver outsized returns simply by executing well on underappreciated ideas. These companies don’t need to dominate a $100 billion category to reward investors — they just need to solve a real problem, move quickly, and fly under the radar long enough for the story to catch up to the fundamentals. That’s how some of this year’s most surprising outperformers have pulled well ahead of the S&P 500, which remains down nearly 2% year-to-date. While broader markets churn, select small-cap biotech names are showing that meaningful innovation still gets rewarded. As the weight-loss drug trade gets crowded and priced in, this could be the moment to look beyond the usual suspects.

Discover more about Medicus Pharma and its plans to commercialize its non-invasive SkinJect patch for BCC.

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