Novo Nordisk (NVO) Drops 3.03% Amid U.S. Prescription Slowdown

On April 25, 2025, Novo Nordisk's stock experienced a 3.03% drop in pre-market trading, reflecting investor concerns and market dynamics.

Novo Nordisk, a Danish pharmaceutical company, has seen its stock price decline due to several factors. Since the launch of its popular weight loss drug Wegovy in 2021, the company has repeatedly raised its annual sales guidance. However, recent data showing a slowdown in U.S. prescription volumes has raised doubts among investors and analysts about the sustainability of this growth trajectory. The company's market capitalization has decreased by 2300 billion dollars, or 45%, since December 2024.

In February 2025, Novo Nordisk forecasted a 16%-24% increase in sales for 2025 under constant currency conditions, a significant slowdown from previous years. Analysts and investors are now questioning whether even this target is achievable, with some predicting that the company may lower its guidance when it reports first-quarter earnings on May 7. Novo Nordisk has stated that it has increased the supply of Wegovy in the U.S. to meet rising demand, and that its guidance already reflects this adjustment. However, data from IQVIA shows that the weekly prescription volume for Wegovy in the U.S. has stabilized since mid-February, while Eli Lilly's competing weight loss injection Zepbound has seen a surge in prescriptions, surpassing Wegovy by 128,000 prescriptions in the week ending April 11.

Novo Nordisk faces intense competition in the weight loss drug market, with Eli Lilly's Zepbound posing a significant threat. Additionally, the company's new drug candidate CagriSema has underperformed in clinical trials, further dampening investor sentiment. Some analysts believe that if the U.S. Food and Drug Administration (FDA) strictly enforces its ban on generic drugs, the prescription volumes for Wegovy and Ozempic could rebound. Novo Nordisk has stated that this ban could shift demand towards its branded products.

Novo Nordisk has also been actively expanding its presence in the Chinese market, where obesity rates are rising rapidly. The company's weight loss drug Wegovy and diabetes drug Ozempic were approved in China in the second and third quarters of 2024, respectively. However, Novo Nordisk faces stiff competition from domestic Chinese companies such as Hengrui Medicine, which is developing its own weight loss drug HRS9531. Hengrui Medicine's drug has shown promising results in clinical trials, with a 16.7% weight loss in Chinese adults after 24 weeks, compared to 12.4% for Eli Lilly's Zepbound and 15.3% for Novo Nordisk's Wegovy. Hengrui Medicine's drug also demonstrated superior blood pressure lowering effects compared to its competitors.

Novo Nordisk has also been expanding its e-commerce presence in China, partnering with JD Health to launch an online store for its GLP-1 drugs, including Wegovy and Ozempic. The company aims to leverage JD Health's extensive user base and logistics network to reach a wider audience and provide better customer service. Novo Nordisk's partnership with JD Health is part of a broader trend in the Chinese pharmaceutical industry, as companies seek to capitalize on the growing demand for weight loss and diabetes treatments. With the Chinese government's increasing focus on obesity and diabetes prevention, Novo Nordisk and other pharmaceutical companies are likely to continue investing in the Chinese market.