"Ongoing struggles intensify for Novo Nordisk"
Novo Nordisk Faces Challenges in Weight Loss Market as Competition Intensifies
Novo Nordisk, a Danish pharmaceutical company, is grappling with a significant market value decline, currently standing at $170 billion (€149 billion). This drop, which represents a two-thirds loss in value in less than a year, is primarily due to emerging cracks in the blockbuster success of its weight-loss drugs, particularly in the U.S. and select global markets.
The competitive pressure comes from Eli Lilly and other U.S.-based weight loss firms, who are eroding Novo Nordisk's dominant position in the GLP-1 drug market. This intense competition has reduced demand for Novo Nordisk's key GLP-1 diabetes and obesity care drugs such as Wegovy and Ozempic, impacting its sales momentum in crucial markets like the U.S.
While Novo Nordisk's obesity care sales still grew impressively by 58% (CER) in the first half of the year, this growth rate has slowed compared to prior periods, reflecting the market share taken by competitors.
Eli Lilly's Mounjaro and Zepbound have gained market share, delivering greater weight loss with reportedly fewer side effects. Early supply shortages pushed patients to competitors for Novo Nordisk, further exacerbating the situation.
Despite these challenges, Novo Nordisk continues to grow, with 2025 sales expected to increase by 8–14% at constant exchange rates (CER) and operating profit by 10–16%, although currency effects may reduce these gains somewhat.
The recent leadership changes at Novo Nordisk, with Lars Fruergaard Jørgensen being replaced by Maziar Mike Doustdar amid the share price decline, are intended to address the company's performance challenges. Doustdar believes the market opportunity and pipeline remain huge.
Novo Nordisk is set to release its earnings on a future date, with the exact date yet to be announced. The company's shares are trading at under 14 times trailing earnings and about 12 times projected earnings, suggesting that the stock may still appear cheap. However, history shows that cheap stocks can stay cheap for a good reason.
[1] Novo Nordisk Interim Report Q1 2025 [2] Novo Nordisk Interim Report Q2 2025
- As Novo Nordisk navigates challenges in the weight loss market, the company is exploring opportunities beyond health-and-wellness, with a growing interest in science-based finance and investing in areas such as business and stock-market.
- In an effort to bolster its financial position and secure its future in the face of intensifying competition, Novo Nordisk is considering diverse strategies that include weight-management, in addition to their traditional research and development in diabetes care.
- While the market share of Novo Nordisk's obesity care drugs is under pressure, the company is actively seeking partnerships with global health-and-wellness firms to expand its offerings and maintain its presence in the weight loss market.
