Novo Nordisk, the Danish pharmaceutical giant known for its weight-loss drugs Wegovy and Ozempic, has issued a stark warning regarding its financial outlook, leading to a significant drop in its stock price. Following an unexpected announcement on Tuesday, the company projected a decline in sales and earnings for 2026, causing shares to tumble nearly 20% in after-hours trading.
Declining Sales Amidst Competitive Pressures
The latest forecast has raised alarms among investors, as Novo Nordisk anticipates that both sales and underlying earnings will decline by 5% to 13% this year. This prediction comes despite the recent introduction of its new Wegovy pill in the United States. CEO Mike Doustdar has attributed the downturn to mounting pricing pressures and intensified competition from rivals offering cheaper alternatives.
In stark contrast, Eli Lilly, a close competitor in the weight-loss market, reported remarkable growth in its earnings, more than doubling its pre-tax profits to $25.73 billion (£18.8 billion) for the year. Sales of Lilly’s Mounjaro weight-loss drug surged 110% in the final quarter of 2025, reaching $23 billion (£16.8 billion) for the year. As a result, Eli Lilly’s shares rose by 8% on Wednesday, with the company forecasting revenues between $80 billion and $83 billion (£58.5 billion to £60.6 billion) for 2026, up from $65.2 billion (£47.6 billion) in 2025.
Market Dynamics Shifting
Dan Coatsworth, head of markets at AJ Bell, emphasised the rapidly evolving landscape of the weight-loss drug market, describing it as “the biggest opportunity in the healthcare industry for decades.” However, this promising outlook is overshadowed for Novo Nordisk, which is struggling to keep pace with its rival. “Novo Nordisk has fallen behind with efforts to improve the efficacy of its treatments, leaving Eli Lilly to gobble up market share,” Coatsworth noted.
The competitive environment has been exacerbated by a recent agreement between Novo Nordisk and Eli Lilly to lower drug prices in response to pressure from the US government. This initiative aims to expand access for insured Americans but has also contributed to price reductions across the sector.
Novo Nordisk’s announcement highlighted the challenges posed by lower realised prices, particularly due to the ‘Most Favoured Nations’ clause in the US and the impending patent expiry of its semaglutide molecule in certain markets. Doustdar acknowledged that 2026 will be fraught with pricing headwinds in an increasingly competitive environment, yet expressed optimism about the early uptake of the Wegovy pill.
Financial Performance Under Scrutiny
In its 2025 financial results, Novo Nordisk revealed a slight decline in earnings, down 1% to 127.7 billion Danish kroner (£14.8 billion), accompanied by a 6% rise in net sales. This mixed performance has left investors questioning the company’s trajectory, especially as the broader healthcare sector has seen a resurgence since last summer.
As the landscape for weight-loss drugs continues to evolve, Novo Nordisk’s ability to innovate and adapt will be critical in regaining its competitive edge.
Why it Matters
The significant drop in Novo Nordisk’s share price not only reflects the company’s immediate challenges but also highlights broader trends in the pharmaceutical industry. As competition intensifies, and pricing pressures mount, the landscape for weight-loss drugs is shifting rapidly. Investors and market analysts will be closely monitoring how Novo Nordisk navigates these turbulent waters, as its future performance could set the tone for the industry at large.
