Novo Nordisk shares plunged on , after the Danish pharmaceutical giant warned of lower-than-expected sales growth for . The company, maker of the widely used diabetes and weight-loss drugs Ozempic and Wegovy, now anticipates adjusted sales growth to fall by 5% to 13% compared to levels, a significant deviation from the 3.5% decline previously estimated by analysts.
The dramatic shift in outlook, revealed in an early release of fourth-quarter results on , sent Novo Nordisk’s stock tumbling as much as 18% in trading, wiping nearly $32 billion off its market capitalization. The sell-off also impacted shares of rival Eli Lilly, which fell by 4.6% as investors reassessed the competitive landscape in the rapidly expanding obesity drug market.
Novo Nordisk CEO Mike Doustdar attributed the revised forecast to a combination of factors, including increasing competition and pricing pressures. A deal struck with the Trump administration to lower the cost of weight-loss drugs for Americans and the impending patent expiration of semaglutide – the active ingredient in both Ozempic and Wegovy – in certain markets, were specifically cited as headwinds. “In , Novo Nordisk will face pricing headwinds in an increasingly competitive market,” Doustdar stated.
The company’s warning comes as it begins to roll out a pill version of Wegovy, launched in early , with hopes that the more convenient formulation will broaden access to the drug. Approximately 170,000 people have started using the Wegovy pill since its release. Doustdar expressed optimism that the pill’s price reduction would ultimately be “an investment for our future” by attracting a larger patient base.
However, Doustdar also cautioned that the company’s share price is likely to decline further before recovering, acknowledging the “unprecedented” and “painful” pricing pressures. He described the price reductions as necessary to expand the market “in a rational way.”
The competitive pressures are intensifying, with Eli Lilly emerging as a significant challenger in both the diabetes and weight-loss drug sectors. Novo Nordisk initiated a restructuring effort last year, costing approximately 8 billion Danish kroner (roughly $1.3 billion), including a change in CEO and a failed hostile bid for obesity-drug developer Metsera, which was ultimately acquired by Pfizer.
The patent expiration of semaglutide is expected to have a 2% impact on group sales for , according to Novo Nordisk’s chief financial officer, Karsten Munk Knudsen. The company’s Indian and Chinese patents on semaglutide are set to expire in the coming months, paving the way for the introduction of lower-cost generic alternatives.
Despite the short-term challenges, Novo Nordisk remains a pioneer in GLP-1 (glucagon-like peptide-1) development, a class of drugs that has revolutionized the treatment of both type 2 diabetes and obesity. The company anticipates European approval for the Wegovy pill in the second half of .
Analysts at Hargreaves Lansdown noted that Donald Trump’s efforts to lower drug prices, alongside patent expirations and increased competition, all contributed to the negative outlook. The stock’s decline on represents the largest one-day selloff since a 21.8% drop on .
The situation highlights the growing tension between pharmaceutical innovation and affordability, as well as the increasing scrutiny of drug pricing in the United States and globally. The market will be closely watching how Novo Nordisk navigates these challenges and maintains its position in the increasingly competitive weight-loss drug market.
