Novo Nordisk shares fell as much as 6% on Monday after the Danish drugmaker’s ambitious growth targets aimed at reviving its fortunes in the increasingly competitive obesity drug market failed to impress investors.
Copenhagen-listed shares were down 6% by late morning, while Novo’s US-listed shares also slipped over 6% in premarket trading.
The company said it aims to launch more than five drugs with “multi-blockbuster” potential by 2030 and generate more than 150 billion Danish kroner ($23 billion) in pipeline sales by 2035.
Novo also expects its revenue growth between 2026 and 2030 to be in line with that of its industry peers, which include Eli Lilly, AstraZeneca, Gilead, Johnson & Johnson, AbbVie, Novartis, Sanofi, Roche, GSK, Amgen, Merck & Co, Biogen, Pfizer and Bristol Myers Squibb.
It also said it would scale capacity to serve 10 times more people with obesity on oral GLP-1 drugs and serve 60 million patients globally.
The targets were part of an effort to convince investors that Novo can maintain growth as competition increases and patent protection for its blockbuster semaglutide franchise approaches its end.
Novo faces pressure after Wegovy success
Novo rode a powerful wave of demand after launching Wegovy in 2021, helping the company become Europe’s most valuable listed company in 2023 with a market capitalisation of more than $600 billion.
But the company’s fortunes have changed sharply.
Novo’s share price has fallen more than 70% from its peak, while rival Eli Lilly has continued to gain.
Novo shares are down about 18% this year on both exchanges where they are listed, compared with a gain of more than 6% for Lilly.
Lilly’s Zepbound is also expected to generate more than $7 billion in additional sales over Wegovy this year, according to LSEG data.
The shift has increased pressure on Novo as it tries to defend its position in a global obesity drug market that some analysts expect to exceed $100 billion in the 2030s.
In the US, Lilly held a 60.9% share of the obesity and diabetes drug market in the second quarter, compared with Novo’s 38.8%, according to Lilly’s earnings presentation last month.
Patent expiry looms over semaglutide
At the centre of Novo’s challenge is semaglutide, the active ingredient in Wegovy and its diabetes treatment Ozempic.
Novo CEO Mike Doustdar told investors at the company’s Capital Markets Day in London on Monday that the impending loss of patent exclusivity was the “elephant in the room”.
Key US patent protection for semaglutide expires in 2032.
The US accounts for more than half of Novo’s sales, making the approaching loss of exclusivity particularly important for the company’s long-term growth outlook.
“This loss of exclusivity is what’s on most people’s mind, and rightfully so,” Doustdar said.
“We created an incredibly attractive market, and now almost every other single pharma company, big or small, is trying to come and compete with us. We need to be ready for that,” he added.
Doustdar said Novo was not underestimating the consequences of the patent expiry, including the potential for pricing pressure.
The company’s strategy is therefore to diversify its business before semaglutide loses exclusivity.
“We plan to come on the other side of the LOE as a bigger company than we are today and a much more diversified version of it,” he added.
Novo targets a broader drug pipeline
Novo said it plans to launch more than five drugs with potential to generate blockbuster sales across multiple indications by 2030.
Its risk-adjusted pipeline is expected to generate more than DKK 150 billion in sales by 2035, including existing pipeline assets.
The company also wants to have at least five Phase 3 programmes in obesity and diabetes and at least five more across other therapeutic areas.
Novo is simultaneously expanding its capacity for oral GLP-1 treatments.
It aims to provide these medicines to 10 times more people with obesity and reach more than 60 million patients globally by 2030.
The company also said it intends to maintain an attractive dividend per share.
Novo cautioned that its ambitions are based on a 2026 baseline and are subject to inherent uncertainty. The targets do not constitute financial guidance or an outlook.
Investors have been wanting proof beyond Wegovy
The new targets come as investors increasingly focus on whether Novo can replenish its pipeline quickly enough to offset slowing growth from its existing franchise.
Doustdar, who was appointed CEO just over a year ago, has moved to tighten costs, eliminate lagging or dead-end clinical programmes and pursue targeted acquisitions and partnerships.
The company received a boost from the launch of the Wegovy pill earlier this year, but a major setback followed when Novo halted trials of its experimental heart drug ziltivekimab.
The development added to concerns about the company’s longer-term sales growth as the clock ticks down toward the loss of semaglutide exclusivity, according to analysts and investors cited by Reuters.
“It will be a very tough task actually to convince the market that the company is in really good shape because of the competition from Lilly, the price pressure, and also the patent expiry of semaglutide at the beginning of the next decade,” said Sydbank analyst Soren Lontoft Hansen in a Reuters report ahead of Monday’s announcement.
Wegovy pill adds another test
Novo’s latest results had offered some reasons for optimism.
The company beat Wall Street expectations and raised its full-year outlook last month, citing “increased expectations” for GLP-1 product sales.
Sales of Ozempic and Novo’s overall obesity portfolio also exceeded analyst estimates for the quarter, according to StreetAccount.
But investors appeared more concerned about the company’s future growth than its latest quarterly performance.
“All in all, this leaves many questions open for 2027,” said Jefferies analyst Michael Leuchten in a research note last month post-earnings.
Revenue from the closely watched Wegovy pill came in slightly below analyst expectations.
While the launch has generated momentum, the weaker-than-expected early revenue has raised questions over whether the oral treatment can become a sufficiently large growth driver.
“Wegovy Pill launch has shown promise, but 2Q results in the US highlight that more needs to be done to satisfy investors and truly beat expectations,” Seigerman said.
Deutsche Bank recently downgraded Novo
Deutsche Bank downgraded the Danish drugmaker to Sell from Hold last month, and lowered its price target, citing concerns over the company’s growth prospects.
Deutsche Bank analyst Emmanuel Papadakis said the bank had reduced its mid-term revenue estimates following the disappointing results from Novo Nordisk’s Ziltivekimab trial.
He highlighted uncertainty over whether Novo Nordisk can return to meaningful growth in 2027, while also pointing to patent expirations further ahead as another challenge.
For Novo, the challenge is therefore no longer simply to expand the obesity drug market.
It must demonstrate that it can retain a meaningful share of that market while building new sources of growth before its most valuable drug franchise faces generic competition.
The company’s new pipeline targets are designed to show investors that the post-Wegovy era can be larger and more diversified.
But the sharp share-price reaction suggests that the market is looking for evidence that Novo can turn those ambitions into commercially successful medicines.
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