Novo Nordisk: Full Guidance Out
On July 29, shares of Novo Nordisk plummeted by 22.4%, its worst single-day nosedive since 1987’s Black Monday. Consequently, the $70 billion loss in market value has caused a stir among investors and European markets.
The drop happened following the company’s full-year outlook. Moreover, the Danish pharmaceutical company has also blamed unregulated compounded versions of semaglutide.
Cut in Growth Outlook
Currently, Novo Nordisk now expects 2025 sales growth between 8% and 14%, slashed from 13% to 21%. Furthermore, the company revised its operating profit growth down to 10%–16%, from a previous range of 16%–24%.
Notably, this is the second guidance cut this year, reflecting intensifying threats to its dominance in the obesity drug market.
Threat from Compounded Drugs
The Danish drugmaker points at the persistent availability of compounded semaglutide for the cut. They claim that U.S. pharmacies continue to sell these unauthorized knockoff versions despite FDA warnings.
“For Wegovy in the US, the sales outlook reflects the persistent use of compounded GLP-1s, slower-than-expected market expansion and competition,” said the drugmaker in its July 29 statement.
“Novo Nordisk is pursuing multiple strategies, including litigation, to protect patients from knockoff ‘semaglutide’ drugs,” the company added on Tuesday. “Novo Nordisk is deeply concerned that, without aggressive intervention by federal and state regulators and law enforcement, patients will continue to be exposed to the significant risks posed by knockoff ‘semaglutide’ drugs made with illicit or inauthentic foreign active pharmaceutical ingredients.”
As a result, growth in U.S. demand for Wegovy and Ozempic has slowed, especially in price-sensitive markets and underinsured populations.
Novo Nordisk Rivalry and Market Shifts
Meanwhile, competition from Eli Lilly’s Mounjaro and Zepbound is gaining speed. Overall, both drugs offer strong efficacy and expanding market share.
In addition, Wegovy’s international rollout has faced slower uptake than Novo Nordisk had expected. In combination with local pricing pressures, this has softened global revenue projections.
Even so, analysts say demand remains high. But headwinds remain.
Novo Nordisk Names New CEO
In response to recent turbulence, Novo Nordisk announced a leadership transition. In effect, Maziar Mike Doustdar will take over as CEO on August 7.
Doustdar has led commercial operations globally and is expected to bring sharper focus on U.S. regulatory and pricing issues.
As a result, investors hope new leadership can restore market confidence. Nevertheless, the stock closed at its lowest level in over 18 months.
Financial Results Still Strong
Despite outlook concerns, Q2 sales rose 18% year over year. Furthermore, first-half operating profits climbed nearly 29%, showing strong fundamentals.
Nevertheless, Novo Nordisk remains profitable and holds a robust pipeline. Specifically, this includes oral semaglutide and newer obesity compounds like CagriSema and amycretin.
Looking Ahead
Overall, Novo Nordisk faces several challenges ahead. First, U.S. enforcement against compounded semaglutide remains uncertain. Second, insurance coverage for branded GLP-1 drugs continues to evolve.
Finally, pricing competition and loss of patients may further pressure margins in key markets.
Nevertheless, with new leadership and promising pipeline assets, the company could possibly rebound. As such, investors will watch the next quarters closely for signs of stabilization.
Photo: News Oresund, CC BY 2.0, via Wikimedia Commons
