Novo Nordisk, the Danish pharmaceutical giant renowned for its weight-loss drug Wegovy, has issued a sobering forecast, projecting a potential drop in profits and sales of up to 13% this year. This marks a significant shift for the company, which has enjoyed consistent double-digit growth since the launch of Wegovy in June 2021, a period that saw a surge in demand for obesity treatments. As the landscape of the weight-loss drug market intensifies, Novo Nordisk’s challenges highlight the impact of pricing pressures and competition.
Shift in Market Dynamics
The company’s recent announcement indicates that it is grappling with several factors contributing to its revised outlook. Key among these are decreasing realised prices in the United States, fierce competition in the obesity drug sector, and the looming expiration of patents on semaglutide—the active ingredient in both Wegovy and Ozempic—in various markets outside the U.S.
Novo Nordisk anticipates a drop in adjusted operating profit and sales, projecting declines between 5% and 13% for the year. This comes on the heels of a 10% increase in sales last year, with analysts previously predicting a much milder contraction of only 2%.
Leadership Changes Amidst Challenges
Adding to the turmoil, Novo Nordisk has announced the departure of two senior executives: Dave Moore, head of U.S. operations, and Ludovic Helfgott, who oversaw product and portfolio strategy. Their replacements will be former UnitedHealth Group executive Jamey Millar and Hong Chow from Merck Healthcare, signalling a strategic shift as the company navigates these turbulent waters.
CEO Mike Doustdar expressed cautious optimism, stating, “While we face pricing headwinds in an increasingly competitive market, we remain encouraged by the promising early uptake from the U.S. launch of the Wegovy pill, and we are confident in our ability to drive volume growth in the coming years.”
Investor Sentiment Declines
The market response to Novo Nordisk’s forecast has been swift and severe. Shares of the company plummeted by 12% following the announcement, reflecting investor concern over the potential for prolonged pricing pressures, especially in the U.S. market. At its peak in June 2024, Novo Nordisk’s market value was around US$600 billion, but it has since lost nearly two-thirds of that value. Other companies in the obesity drug sector were also affected; for instance, shares of Eli Lilly dropped by 4%, while Structure Therapeutics and Altimmune saw declines of 6.2% and 4.2%, respectively.
Portfolio manager Lukas Leu from ATG Healthcare remarked that the guidance for 2026 was “worse than expected,” as he had anticipated a more stable outlook, expecting sales and profits to remain flat or decrease by a modest 5%.
Navigating a Competitive Landscape
Novo Nordisk is locked in a fierce battle with Eli Lilly for dominance in the obesity treatment market. The introduction of competing products, such as Lilly’s Zepbound, which has recently surpassed Wegovy in U.S. prescriptions, has intensified the pressure. The company’s strategy under Doustdar includes aggressive marketing for the newly launched Wegovy pill to reclaim its position in a rapidly evolving market.
Despite the challenges, Novo Nordisk’s adjusted sales guidance suggests that, on a non-adjusted basis, the midpoint forecast for 2026 could be around a 1% decline, buoyed somewhat by a reversal of US$4.2 billion in sales rebate provisions associated with the 340B Drug Pricing Program.
In the fourth quarter of the last financial year, operating profit fell by 14% to 31.7 billion crowns, slightly below the 31.2 billion crowns predicted by analysts. Global sales of Wegovy saw a 12% decline to 21.9 billion crowns compared to the previous year.
Why it Matters
The forecast from Novo Nordisk signals a critical juncture not only for the company but for the entire obesity drug market. As competition heats up and pricing pressures mount, the implications for innovation, access, and affordability in weight-loss treatments could reshape the landscape. Investors and healthcare stakeholders alike will be watching closely to see how Novo navigates these challenges and whether it can sustain its growth trajectory in an increasingly competitive environment.
