Morgan Stanley Downgrades Novo Nordisk to Underweight, PT to $47 from $59.

Morgan Stanley Downgrades Novo Nordisk to Underweight, PT to $47 from $59.

Morgan Stanley has downgraded Novo Nordisk to underweight, setting a new price target of $47, a significant reduction from its previous target of $59. This move follows the investment bank's analysis of the potential failure of Novo Nordisk's Alzheimer's trial and other market concerns Morgan Stanley expects Novo Nordisk Alzheimer trial to fail as it slashes rating^[1].

The analysts led by Thibault Boutherin at Morgan Stanley have expressed a 75% chance that the trial of semaglutide, the key ingredient in Ozempic and Wegovy, will not reach statistical significance in reducing dementia. This failure is expected to trigger a high single-digit percentage share price decline Morgan Stanley expects Novo Nordisk Alzheimer trial to fail as it slashes rating^[1].

Additionally, Morgan Stanley points to declining weekly prescriptions for Ozempic and the growing prescriptions for Eli Lilly's Mounjaro. The analysts also anticipate a 50% cut in price from Medicare Part D for semaglutide and a head-to-head trial of CagriSema versus Lilly's Zepbound that may not show differentiation Morgan Stanley expects Novo Nordisk Alzheimer trial to fail as it slashes rating^[1].

The downgrade comes amidst slowing prescription growth in the United States for Novo Nordisk's key diabetes and obesity treatment products, including Wegovy, Ozempic, and Rybelsus. Increased competition within the GLP-1 segment has also been cited as a contributing factor Morgan Stanley Downgrades Novo Nordisk to Underweight^[2].

Novo Nordisk's net sales are primarily driven by diabetes and obesity treatment products, with Europe/Middle East/Africa and the United States being the key markets. The company's revenue breakdown by product family and geographic region reflects its focus on these areas Morgan Stanley Downgrades Novo Nordisk to Underweight^[2].

The downgrade suggests a 14% downside potential from Friday's closing price, with Morgan Stanley's new target of 300 Danish kroner representing the lowest price target on the market Morgan Stanley Downgrades Novo Nordisk to Underweight^[2].