By Bhanvi Satija

Dec 24 (Reuters) - U.S. retail investor fund flows into

Novo Nordisk surged 32-fold on Friday, as the Danish

drugmaker's weaker-than-expected obesity drug data offered a

rare dip-buying opportunity, according to Vanda Research.

Daily net flows climbed to $15.6 million from $0.49 million

a day earlier, after eagerly anticipated data showed Novo's

experimental drug, CagriSema, helped patients cut 22.7% of their

weight-short of the anticipated 25%.

Novo competes with U.S. rival Eli Lilly ( LLY ) in the

burgeoning market for weight-loss treatments, which is projected

to exceed $150 billion in revenue within the next decade.

"Retail investors love to buy dips, especially in popular

stocks..and do so, until that doesn't work anymore," said Marco

Iachini, senior vice president of research at Vanda.

Shares of Novo Nordisk dropped 27% on Friday, erasing over

$100 billion in market value. Its U.S.-listed shares tumbled 21%

to $81.50, their lowest level since August 2023.

"Right now Novo only dipped below S&P 500 performance for

the first time in 2 years so, probably too early to see them

(retail investors) give up on their buy-the dip-bias," he said.

The retail flows on Friday likely provided an exit for

institutional investors.

Funds from retail investors touched a one-day high of $23.5

million on March 7, data from Vanda shows, after Novo's

amycretin drug helped obese patients cut 13% of their weight in

a study.

The success of Novo's Wegovy and Lilly's Zepbound

weight-loss drugs has revived retail interest in the healthcare

sector.

"With their GLP-1 product in the market and Eli Lilly ( LLY ) being

a lot on the news...a lot of retail investors know about Lilly,"

said Sel Hardy, vice president of equity research at CFRA.

She suggested that a sell-off, like Lilly's stock dip in

October, and mid-November, could provide "an attractive entry

point" for retail investors

Net retail flows into Lilly have outpaced Novo in the second

half of 2024, according to Vanda.

For Lilly, net retail purchases peaked in August after its

weight-loss drug sales surpassed $1 billion for the quarter,

prompting a $3 billion forecast increase.

However, retail activity in these stocks lags behind tech

giants such as Nvidia ( NVDA ) and Tesla, where

activity often reaches the high teens.