Copenhagen/New York – Shares in Danish pharmaceutical giant Novo Nordisk plummeted on , after the company issued a surprisingly cautious forecast for , predicting a decline in both sales and profit. The news sent Novo Nordisk’s American depositary shares down 11% as of 12:05 pm ET, marking a significant setback for the maker of Wegovy and Ozempic.
The company released the forecast ahead of its full quarterly report, scheduled for release on . Novo Nordisk anticipates a sales decline of between 5% and 13% at constant exchange rates for the year, a stark contrast to the 10% sales increase and 6% operating profit increase reported for .
The downturn reflects expectations of continued growth in international operations, offset by a projected decline in sales within the United States, according to a company statement. This comes as Novo Nordisk battles to maintain its leading position in the rapidly expanding weight-loss drug market, facing increasingly fierce competition, particularly from U.S.-based Eli Lilly.
Novo Nordisk’s struggles over the past 18 months have been compounded by the success of Eli Lilly’s tirzepatide, marketed as Mounjaro and Zepbound. Tirzepatide has demonstrated more pronounced weight loss results than Novo Nordisk’s medications and has surpassed Novo in U.S. Market share.
The company is pinning its hopes on the recent launch of an oral version of Wegovy, the first oral GLP-1 treatment for obesity available in the U.S. Market, and its next-generation weight-loss injectable, CagriSema, to recapture market share and revive its stock price. The oral Wegovy was launched in early January, and while its initial uptake has been promising, analysts are closely monitoring its performance.
However, the market remains skeptical. According to Morningstar analyst Karen Andersen, investors are looking for evidence that Novo Nordisk is maximizing its potential, particularly in the direct-to-patient channel, where it has fallen behind Eli Lilly in .
Adding to the pressure, Novo Nordisk faces the impending loss of exclusivity for semaglutide – the active ingredient in both Wegovy and Ozempic – in several key markets including Canada, Brazil, and China in . This, combined with significant pricing pressures in the U.S., is expected to moderate sales growth to single digits this year after several years of more substantial increases.
The company’s stock experienced a significant downturn in , falling 46.5% due to a series of guidance cuts, leadership changes, and intensifying competition. While the stock had begun to recover following the launch of the oral Wegovy, announcement has erased much of that progress.
Barclays analyst James Gordon noted that the guidance could lead to further downgrades but also potentially act as a “clearing event” given the “significant investor concern” surrounding the outlook. He suggested that investors might view the decline as an opportunity to invest in the oral Wegovy launch and the potential for increased volume of injectable Wegovy in the U.S.
The situation highlights the increasing challenges facing established pharmaceutical companies as competition intensifies in the lucrative weight-loss drug market. Eli Lilly is also expected to launch its own weight loss pill in the first half of , further intensifying the rivalry.
